Prague, Feb 21 (CTK) – Czech Prime Minister Bohuslav Sobotka (Social Democrats, CSSD) will ask the Financial Authority to explain the questions surrounding untaxed one-crown bonds, he told media yesterday, adding that the answer Finance Minister Andrej Babis (ANO) has sent him in this respect is insufficient.
Babis bought ten-year one-crown bonds with 6-percent interest from Agrofert, a giant holding he owned until recently, for 1.482 billion crowns in 2013.
Sobotka said the information provided by Babis does not make him sure than the Financial Authority took a responsible approach to the untaxed bonds affair.
In his letter, Babis criticises his former deputy minister in charge of taxes, which arouses questions about the Financial Authority’s performance, Sobotka said.
He repeated that it is not clear whether the one-crown bonds served for tax evasion and whether companies borrowed money from their owners under disadvantageous conditions.
“I want a clear signal that the deals were in order. If not, I want to know what steps the Financial Authority will take,” Sobotka said.
Babis wrote to Sobotka that the Financial Authority will not make any across-the-board check focusing on untaxed one-crown bonds. He reacted to a previous letter, in which Sobotka asked him to say whether the Financial Authority checked the controversial bonds.
Babis wrote that the Financial Authority previously concluded that the issuing of one-crown bonds was never banned by any legal directive, which is why the practice of untaxed interest yields cannot be assessed as unlawful without any other related aspects.
That is why Babis considers any across-the-board checks of the bonds unnecessary.
In connection with his Agrofert bond deal, Babis faces a criminal complaint on suspicion of tax evasion and breach of trust.
Sobotka, too, criticises the deal as aimed at tax optimisation.
On Monday, Babis proposed to the Chamber of Deputies to impose a tax on the one-crown bonds that companies’ owners or related people bought from their respective companies.
The measure would apply to a few dozens of people, including Babis, and it will leave the state bonds untouched.
Opposition TOP 09 chairman and former finance minister Miroslav Kalousek told journalists that his party would not back Babis’s proposal because he has made it a part of TOP 09’s bill increasing tax reliefs for blood and bone marrow donors.
In doing so, Babis has taken the donors hostage, which is disgusting, Kalousek said.
He said Babis has submitted the proposal only because it has turned out that he circumvented the law in order not to pay taxes.
The Financial Authority should act and enquire into whether Agrofert issued bonds unlawfully, for other reasons than tax optimisation. No legislative change is needed, Kalousek said.
“It would be scandalous if the Financial Authority failed to fulfil its tasks,” Kalousek said.
The Financial Authority has not uncovered any tax evasion linked to one-crown bonds, its director Martin Janecek said earlier.
($1=25.449 crowns)
rtj/dr/pv
