Czech PM presents compromise variant of govt tax package to ODS

Necas would not release details about the compromise draft before he presents them to the ODS deputies and to the ODS´s government partners.

Two sources from the ODS have told CTK that the compromise rests in the lower VAT rate being raised by one percentage point, from 14 to 15 percent, as from 2013, and the basic higher rate remaining unchanged at 20 percent.

The government´s crucial tax package including both VAT rates´ increase by one percentage point and other changes aimed to enhance state revenues, was rejected by the Chamber of Deputies a few weeks ago when six rebels among the ODS deputies voted against it.

The cabinet then submitted the package to the Chamber of Deputies again in the same wording and linked a vote of confidence to it.

The ODS leadership has been negotiating about the package with the rebels since.

Necas today said the government must react to the ruling parties´ failure in the October 12-13 regional elections and to the situation where it has a very fragile majority in the Chamber of Deputies.

That is why the cabinet, which also comprises the conservative TOP 09 party, and the Liberal Democrats (LIDEM), is going to change "accents in its policy," Necas said.

"I´ve acquainted the [ODS] executive council members with the compromise proposal on which, in my opinion, consensus may be reached both inside the ODS and with our coalition partners," Necas said.

Finance Minister Miroslav Kalousek (TOP 09), the package´s initiator, previously said he was against the package being changed.

Addressed today, he told CTK that he reckons with a tax package compromise. In exchange, however, he wants the ODS to guarantee the passing of another two crucial but controversial pieces of legislation initiated by TOP 09.

"In order not to complicate the situation for him [Necas], we are ready to accept a certain compromise regarding the consolidation [tax] package," Kalousek said on behalf of TOP 09.

A condition for this are the ODS´s guarantees that the pension reform and the church restitution bill will be passed, he continued.

"Moreover, we´d like at least a moral pledge that this was the last time that [the ODS] showed such behaviour - reluctance and failure to observe agreements," Kalousek said.

One of the rebelling ODS deputies, Marek Snajdr, told CTK that the ODS should discuss not only the tax package. "We...must discuss the government´s main priorities for the rest of the government´s term in office," Snajdr said.

Necas told journalists, in connection with the ODS´s unfavourable results in the weekend polls, that no one called on him to resign at the ODS executive council meeting today.

According to Snajdr, the debate was "stormy and passionate."

"After all, it was expectable in view of the [weekend] election outcome. The discussion will continue and its result will undoubtedly be seen at the ODS congress in early November," Snajdr said.

He called it logical that the ODS´s election flop will influence the election of the new party leadership by the national congress.

In the elections, the ODS narrowly won only in one of the country´s 13 self-governing regions, while the leftist opposition won in 11 regions and a local mayors´ movement in one.

Asked to comment on the suggestions by some that President Vaclav Klaus should return to the ODS as its honorary chairman, Necas said it is primarily up to the candidate for a post to show interest in it.

"The president, when announcing his departure from the ODS [in 2008], said it was definitive. Of course, it this changed, if is something that can be rationally considered," Necas said.

Author: ČTK
www.ctk.cz