Tax bill vote postponed

Prague, Oct 18 (CTK) - The lower house of Czech parliament may vote on a tax package including increased VAT rates, with which the Petr Necas (Civic Democrats, ODS) coalition government tied a confidence vote, only after the ODS election congress that will be held on November 2-4.

Necas has not ruled out such a possibility.

According to CTK sources, Necas would like the ODS congress to make support for the tax package obligatory for all MPs representing the party.

Several weeks ago the lower house rejected the draft package because six ODS rebelling MPs voted against it along with the left-wing opposition. The government submitted the package to parliament again in the same wording and linked it to a confidence vote. Negotiations with the rebels on changing the package started simultaneously.

The lower house session opening next week is to debate the package in the second and third readings.

If pushed through the lower house, however, the package will be probably vetoed by the upper house dominated by the opposition Social Democrats. The lower house may override its veto.

The Necas government considers the package of tax bills, which raises both VAT rates by one percentage point, crucial for the next year's state budget.

The six rebels say raising taxes goes counter to the programme of the right-wing ODS.

ODS MP Petr Tluchor, who often speaks on behalf of the rebel group, said it seemed pointless to him to take the parliamentary vote on the tax bills only after the ODS congress.

Tluchor said the ODS congress should first of all cope with its defeat in the regional and Senate elections and harmonise the ODS programme and the government policy.

He said he firmly believes that taxes should not be raised.

The ODS leadership and the rebelling MPs have failed to reach an agreement on a compromise version of the tax package so far.

On Monday, Necas proposed that only the lower VAT rate be raised, from 14 to 15 percent, while the higher rate should stay at 20 percent. But Tluchor rejected the offer as "desperately insufficient." The negotiations will continue next Tuesday.

According to speculations, the rebels may seek the creation of a new government with its current parties, but in a new line-up without Necas.

But if the government falls, President Klaus may entrust the opposition Social Democrats with forming a new cabinet.