MPs back stabilisation package

Prague, Sept 18 (CTK) - The Czech Chamber of Deputies supported in the first reading yesterday the government's stabilisation package that proposes higher VAT rates and other budget austerity measures that are to bring the state over Kc20bn next year.

The government submitted the package again after it was rejected earlier in September by the votes of rebelling deputies of the senior government Civic Democratic Party (ODS).

Most of the rebels abstained from the vote on rejecting the package yesterday, only two voted actively against the rejection.

The government tied a confidence vote with the repeatedly submitted package.

Besides raising VAT rates from 14 and 20 to 15 and 21 percent, the package also raises the real estate transfer tax from 3 to 4 percent, gradually abolishes "green" oil for farmers, and others.

Bohuslav Sobotka, chairman of the opposition Social Democrats (CSSD), said his party will propose a change to the amendment to the VAT law that the Chamber of Deputies also discusses and it will propose that VAT rates remain at 14 and 20 percent.

He promised the CSSD will reintroduce lower VAT on food, books and medicines if it succeeds in the next general election.

Prime Minister Petr Necas (ODS) said when Sobotka was finance minister, the then CSSD-headed government did decrease the regular VAT from 22 to 19 percent, but transferred many items to the higher rate.

The changes to laws will now be discussed by the Chamber of Deputies' budget committee. The final vote on the package is to take place at the Chamber of Deputies' session that starts on October 23.