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Government supports taxation of one-crown bonds

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Prague, April 19 (CTK) – The Czech government approved a bill to tax the profits from one-crown bonds as of 2018 and none of the ministers was against the proposal submitted by Finance Minister Andrej Babis (ANO), its spokesman Martin Ayrer said on Twitter during a cabinet meeting on Wednesday.

Prime Minister Bohuslav Sobotka (Social Democrats, CSSD) challenged Babis’s plan before the cabinet meeting, saying there is not enough time to pass the bill by the autumn general election. He said Babis should have submitted the bill earlier.

Sobotka also asked Babis to tell the cabinet meeting next week how the financial administration was dealing with the issues and purchases of one-crown bonds that were bought by the owners of the bond-issuing firms.

Agriculture Minister Marian Jurecka (Christian Democrats, KDU-CSL) said the argument of confidentiality does not remove the duty of reporting on its work from the financial administration. The administration should present general data on the checks and defects revealed at least, he said.

According to the bill that Babis submitted on Wednesday, the profits from one-crown bonds bought from the bond-issuing companies by their owners or people financially related to the companies would be subject to taxation. The bill therefore would not apply to the one-crown bonds issued by the Czech state.

The CSSD and other parties have criticised Babis for having bought one-crown bonds from Agrofert, a giant company he owned then, worth 1.5 billion crowns in 2013. This type of bonds was not subject to taxation.

Babis will gain tax benefits of 52 million crowns from the bonds by the end of this year. He said he would send this sum to charity.

Czech legislation enabled the issuing of one-crown bonds that are not subject to taxation in the early 1990s. Former finance minister Miroslav Kalousek (now right-wing opposition TOP 09) made use of this opportunity by issuing one-crown state bonds in 2011. Companies cannot use this tax trick anymore because the law was amended in 2013.

Kalousek said the bill that Babis presented on Wednesday is nothing but his effort to introduce a legislative amendment that would remove his own tax offence. It is a shame that the CSSD and the KDU-CSL supported the proposal, he said.

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