Czech businessmen call for faster fiscal consolidation.

By bne IntelliNews June 25, 2010
The country's industry confederation SP urged the new government to reduce the general government deficit to below the reference value of 3% of GDP faster - already in 2012. To this end, the current two VAT rates should be unified at some 17-19%. On the other hand, SP declared itself against the increasing of the corporate income tax as higher direct taxes would bring less money than higher indirect taxes. SP also proposed lowering the ceiling for social and health insurance and advocated finding new sources of budget revenues. In the convergence programme, the country has pledged to reduce the fiscal gap from the targeted 5.3% of GDP for this year to 4.8% of GDP in 2011, 4.2% in 2012 and 3% of GDP in 2013. For achieving next year's target, additional savings of some CZK 60bn would have to be realised. With regard to improving the competitiveness of the economy, SP proposed a reform of the education system, support for R&D, comprehensive amendments to the Labour Code, preparing a long-term strategy for infrastructure development and update of the energy strategy, support to experts and sustainable care for the environment. These and other proposals are included in SP's document with 10 priorities for the future country's development, which the industry confederation wants to submit to the five parliamentary parties, the central bank governing board and the trade unions.

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