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Minister wants more intensive controls of one-crown bonds

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Prague, April 25 (CTK) – The Czech Financial Administration should pay greater attention to the firms that issued one-crown bonds in 2012 after it found out mistakes in more than one third of controls, Agriculture Minister Marian Jurecka (Christian Democrats, KDU-CSL) said yesterday.

Finance Minister Andrej Babis (ANO) and the administration’s director Martin Janecek should act quickly, Jurecka said in reaction to a report on the Financial Administration’s activity in the sphere of one-crown bonds which Babis submitted to the government on Monday.

The release of the control data was urged by the senior government Social Democrats (CSSD) on Friday.

Prime Minister and CSSD head Bohuslav Sobotka said the issuing of the bonds may have been motivated by the effort to avoid paying taxes.

On Monday, Babis submitted a report, according to which the Financial Administration carried out 1061 controls and ordered the payment of an additional 87 million crowns in taxes.

However, Sobotka said it is not yet sure that the administration will control all cases and in time.

Jurecka said today Babis’s material has uncovered serious facts.

“Out of the 525 firms that issued one-crown bonds in 2012, the Financial Administration only controlled 233 during four and a quarter years. I do not consider this to be an intensive procedure,” he said.

Jurecka said the possible avoidance of tax payment is indicated by the fact that firms were issuing one-crown bonds at a time when they were not taxable, but did not do so in the following years.

Jurecka said the Financial Administration should have carried out more controls after it found mistakes in 83 out of 233 firms checked.

“Mistakes were found in 35 percent of the entities in the controlled sample. This is a high number which should motivate every director of a supervisory control body to focus on the whole group with a strong intensity,” Jurecka said.

That is why Babis and Janecek should work quickly to control all firms, he added.

The possibility to issue untaxed one-crown bonds was introduced in the first half of the 1990s. Former finance minister Miroslav Kalousek (2006-13) used it to issue state bonds for people. Later, business companies started issuing such bonds as well.

The public started to show interest in them after it became known that Babis bought one-crown bonds issued by Agrofert, which he owned then, for 1.5 billion crowns.

The one-crown bond system was abolished by law in 2013.

($1=24.796 crowns)

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