Nečas: State budget approval requires tax changes

Prague, Sept 18 (CTK) - The state budget for next year cannot be approved without the passing of a government-sponsored package of tax changes, Prime Minister Petr Necas (Civic Democrats, ODS) said yesterday at the start of a session of the Chamber of Deputies that is to deal with the package again.

The package of tax changes and other measures aims to stabilise public budgets. It was rejected at the first September session of the lower house of parliament by the votes of six ODS deputies who disagree with it.

Necas submitted the package to the government again afterwards and sent it to the lower house. He ties the new vote on the bill with a vote of confidence in his government.

"Unless the package is passed, the government will resign," Necas sid.

He challenged the ODS rebels' demand that money should be found in spendings, not in higher taxes.

Necas said the proposed expenditure for 2013 is 20 billion lower than this year and returns to the level of 2009.

He said the package that contains among others a 1 percentage point increase in both rates of VAT to 15 and 21 percent generates 25 billion crowns.

Finance Minister Miroslav Kalousek (TOP 09) said 68 percent of budget measures are on the side of savings and a mere 32 percent is to be generated by an increase in taxes.

"The government is convinced that this mix is optimal," Kalousek said.

Bohuslav Sobotka, chairman of the opposition Social Democrats (CSSD), reacted to Necas's words saying a possible rejection of the package need not mean the country would have to apply a stop-gap budget.

He said the government has space to react even to the rejection of the package and repeated that the CSSD will not support the bill.

The ODS deputy group agreed this morning to create a working group to deal with the rebels' demands.

The revolting lawmakers are against raising VAT next year. They want state spendings to be restricted and privatisation of state property completed.

They said they will support the package in the first reading yesterday.

($1=18.719 crowns)