Prague, Feb 16 (CTK) – Czech Prime Minister Bohuslav Sobotka (Social Democrats, CSSD) has asked Finance Minister Andrej Babis (ANO) whether the Financial Authority dealt with the cases of the issue and purchases of one-crown bonds in a letter dated February 15 and released to CTK on Thursday.
In 2013, Babis bought one-crown bonds of his Agrofert concern for 1.482 billion crowns.
Babis accused Sobotka of campaigning before the March election congress of his CSSD and he said Sobotka could have solved the bonds problem long time ago.
“The prime minister did not vote for the abolition of the possibility not to pay taxes,” Babis said.
Sobotka also asks Deputy PM Babis how he would assess the situation of a firm issuing one-crown bonds that only its owner buys.
“Is this not a suspicious behaviour with the aim to avoid tax payment? Is this not a situation that the Financial Authority should check in the interest of the state budget and citizens of the Czech Republic?” Sobotka asks in his letter.
Babis denies having violated law by the purchase of the Agrofert bonds.
He said on Thursday that he did not consider the situation in Agrofert circumventing the tax payment.
In his letter to Babis, Sobotka refers to an interview with former deputy finance minister Simona Hornochova in Hospodarske noviny (HN) daily paper. She told HN that the issue of one-crown bonds was a common way of avoiding the taxation of dividends.
“As far as I know, the Financial Authority did nothing in this respect,” she said.
Sobotka writes in his letter thar he would be surprised if the authority did not look into the problem. This si why he asks Babis what conclusions the Financial Authority reached in the investigation into these cases and what measures it proposed.
In reaction to a CTK question on Wednesday, the Financial Authority said in general that “if its employees find out the facts that are at variance with tax regulations in connection with the bonds, they will definitely deal with this violation in harmony with the fundamental aim of the tax administration, which is to correctly set and collect taxes.”
Babis told CTK that he had sent the letter to his deputy Alena Schillerova since he would not interfere in the work of the independent Financial Authority. “We will comment on this as the ministry… I will definitely answer the PM,” Babis said.
Sobotka recently blamed Babis for circumventing valid regulations, using strong words. Babis “fucked the Czech state off,” he said.
Babis said last week he would propose that the profits from the one-crown bonds, issued when they were not subject to tax, be taxed as of next year.
Not only Agrofert, but also other firms issued untaxed one-crown bonds.
“My firm issued these bonds to secure its funding and it was (TOP 09 and former finance minister Miroslav) Kalousek who enabled it,” Babis told public Czech Television (CT) on Sunday.
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.
