The new government declaration including also economic goals for the future was presented in Parliament by Vaclav Klaus on 23 July 1996. The minority government won a confidence vote on 25 July 1996.
We have summarized some of the basic economic policy principles which were included in the declaration.
1. Basic Principles
2. The Financial, Taxation And Pricing Policy Will Focus On:
3. Privatization
The new government will concentrate on preparation and approval of the privatization procedure in the area of:
4. Others
Other principles cover the business environment and social security policy:
The government declaration does differ to some extent from the coalition agreement, mainly by way of silence on certain subjects. For example, the government declaration does not mention separating investment funds from banks, which many see as an important step in changing the nature of the investment fund market.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
For further information contact Paul Antrobus or Richard Fletcher, Arthur Andersen Prague, tel +42 2 2440 1300 or enter a text search 'Arthur Andersen' and 'Business Monitor'.
We have summarized some of the basic economic policy principles which were included in the declaration.
1. Basic Principles
- prosperous and stable economy based on the low rate of inflation and on a long-term trade balance, particularly on current account;
- basic priority will be the maintenance of the high rate of economic growth, low level of unemployment, further privatization of state property, deregulation and improvement of markets, finalization of price liberalization and continuous modification of regulated prices.
2. The Financial, Taxation And Pricing Policy Will Focus On:
- balanced state budget;
- reducing tax rates by approximately 1% per annum;
- reducing taxes generally by the means of shorter depreciation life for machinery, equipment and buildings and accelerated depreciation of bad debts;
- support for non-profit making organizations;
- further changes in the area of indirect taxation to correspond with the European Union legislation.
- improvement of tax administration, including negotiations of agreements with foreign governments in respect of cooperation between tax and customs authorities, with the aim to fight against tax evasion;
- deregulation of rental for flats and energy ( electricity, gas, heat);
3. Privatization
The new government will concentrate on preparation and approval of the privatization procedure in the area of:
- banking;
- strategic industrial companies;
- other companies, particularly in the field of energy.
4. Others
Other principles cover the business environment and social security policy:
- revision of the existing economic and commercial legislation;
- prevention of monopoly and trust agreements;
- development of the monetary and capital markets;
- higher transparency and security of capital markets;
- growth of industry and increase of competitiveness on domestic and foreign markets;
- better protection of creditors in commercial relationships;
- enforcement of antidumping legislation;
- separation of pension insurance from the state budget and changes in the funding system;
The government declaration does differ to some extent from the coalition agreement, mainly by way of silence on certain subjects. For example, the government declaration does not mention separating investment funds from banks, which many see as an important step in changing the nature of the investment fund market.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
For further information contact Paul Antrobus or Richard Fletcher, Arthur Andersen Prague, tel +42 2 2440 1300 or enter a text search 'Arthur Andersen' and 'Business Monitor'.
