The lower house on Friday approved the government’s tax reform. The bill, which was passed in its third reading, envisages a one percent hike in Value Added Tax to 15 and 21 percent respectively, fewer tax reliefs for entrepreneurs and the introduction of a 7-percent “solidarity tax” for people with monthly salaries over 100,000 crowns. The tax reform is part of an austerity package aimed at bringing the deficit in public finances under 3 percent of GDP. The proposed tax hikes, which will now be debated in the Senate came under fire from some deputies within the prime ministers Civic Democratic Party who say they will undercut growth.
Finance Minister Miloslav Kalousek went before Parliament’s security committee on Friday to defend himself against allegations that he had lobbied and even threatened the police president in connection with the investigation of the dubious purchase of CASA planes for the Czech army. Addressing the committee, Mr. Kalousek admitted that he had made three phone calls to the police president on July 4th but claimed that had all been related to the purchase of a new fleet of cars for the police. He firmly denied having put pressure on the police president in connection with the CASA investigation which concerns a close party colleague of his, Vlasta Parkanová.
Meanwhile the police president, Petr Lessy, who told the same committee on Thursday that the finance minister called him personally three times in one day to complain about the police investigation in the purchase of CASA planes for the army is standing by his story and says he is ready to take a lie detector test to prove it. He claims that Mr. Kalousek first threatened him and the whole team working on the case and later called again to tone down his remarks and apologize.
Interior Minister Jan Kubice has asked the Supreme State Attorney Pavel Zeman to look into claims that political pressure was exerted on the police in connection with the CASA investigation. Mr. Kubice said he wanted the matter investigated despite receiving assurances from police president Petr Lessy that the investigation was proceeding as it should. Mr. Lessy told Czech Television that the calls from the finance minister had not in any way affected the work of the police on the case.
The security and defence committee in Parliament on Friday called on Prime Minister Nečas to dismiss the finance minister over the affair. Mr. Nečas had earlier warned all members of his cabinet that anyone who tried to interfere in the investigation of the sensitive CASA case would have to go. Mr. Nečas has said little in the matter so far, merely stating that the police president’s accusations were very grave and he was waiting to see the evidence produced.
The opposition Social Democrats say they will table a vote of no confidence in the centre-right government next week. Following a meeting of the deputies’ club on Friday party leader Bohuslav Sobotka said the present situation was intolerable and that the opposition would make the move despite the fact that to all accounts it does not have the votes needed to bring down the government. Observers note that the opposition may be hoping to get unexpected support from those Civic Democrats who strongly oppose the government’s tax reform.
The TOP 09 deputies’ club have agreed on a possible successor to the post of deputy speaker of the lower house vacated by Vlasta Parkanová who faces prosecution in connection with the dubious purchase of CASA military aircraft. The head of the deputies’ club Petr Gazdik said on Friday that he firmly believed Ms. Parkanová would clear her name in court during Parliament’s summer break and take up the position again in the autumn. In the event that this did not happen the party would suggest deputy Jiri Oliva as a possible replacement. The 60-year-old Oliva is a deputy for the Hradec Kralove region and specializes in environmental and agrarian matters.
The lower house on Friday approved an amendment to the law on the distribution of state revenue to municipalities. If it is approved by the Senate and signed into law by the president, the revised legislation will benefit mid-sized and smaller municipalities who stand to gain roughly 12 billion crowns by the amendment. In the past smaller municipalities got approximately 6800 crowns per citizen, the amendment would give them 9000. On the other hand the big cities - Prague, Brno, Plzen and Ostrava will lose money.
Specialists have concluded that another stretch of Prague’s Evropská Street presents a serious hazard for motorists and maintenance workers have been called in to fix it. Part of the busy road collapsed last Sunday creating a several-metre wide crater. Luckily no one was hurt in the incident. Construction experts investigating the accident have ruled out that the road collapsed in connection with the construction of the metro nearby. They ascribe it to hollows beneath the asphalt which must have filled with water after several days of heavy rain.
Two judges from the Litomerice courthouse have been charged with corruption and abuse of office. Josef Knotek and Ladislav Jelinek are suspected of having accepted ten-thousand crown bribes in order to pass milder verdicts or let people out on bail. If convicted they will face up to ten years in prison.
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