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Political Digest March 2018 - Running the family business

Company: Grayling Czech Republic, s.r.o.

Over three months have passed since Andrej Babiš was appointed as the new prime minister (PM) following the parliamentary elections in autumn 2017, yet the Czech Republic still has no clear coalition or majority government. What is more, while the current government, having resigned, only plays a caretaker role, Mr Babiš continues to make some significant changes in the public sector, despite the clamouring of the opposition parties.

Following major personnel changes at several public institutions, the government proposed an amendment to the Public Services Act just last week. This bill puts forward new rules which facilitate more flexible and faster changes of personnel in the public sector and would hand more powers to the PM.

Unsurprisingly, the proposal merely agitated the opposition parties even more, and even piqued certain other stakeholders, including several ministries. Furthermore, the government has requested a statement from the European Commission, which may not be inclined towards the bill. As some of us vividly remember, the Public Services Act and insufficient depoliticisation were reasons why the Czech Republic had been temporarily denied access to EU funds in the past.

Digital highway policy

Besides the past few months’ events related to the taxi drivers’ strike, targeting new shared economy services in transportation, such as UBER and Taxify, the transport ministry put forward a new amendment to the Ground Transportation Act. The focus of this proposal is the regulation of motorway fees. The legislative amendment proposed a rise in the price for the car vignettes from CZK 1,500 (EUR 60) to EUR 2,000 (EUR 80) per year.

What is more, stickers should vanish from windscreens. Instead, the motorway tax payment will be digitally linked to the car’s registration plate. The new proposal should save tens of millions of crowns per year. At the same time, the ministry is proposing an exemption from the motorway tax for all electric vehicles. Sounds pretty good for a country lagging in eGovernment policies.  

Beware of Pirates!   

Although we welcome all initiatives to increase transparency and efforts that implement progressive game-changing ideas, sometimes the proposals fall short of expectations and result in irreversible changes. We witnessed similar hiccups with the Contracts Register Act, when the quest for transparency was used as an excuse to propose several strict measures, but eventually fell short of expectations, since a lot of exceptions were added.

During the parliamentary committee meetings in March, a government amendment to the Tax Code was discussed, and a very surprising amendment to this act was tabled by the chair of the parliamentary club of the Pirate Party, Mr Jakub Michálek. This amendment proposed that, in cases of suspected illegal tax evasion exceeding CZK 500,000 (EUR 20,000), lawyers and tax consultants would have to provide all necessary information to local authorities. Mr Michálek advocated this proposal as a means to stop tax evasion by large corporations, following up on recent efforts spearheaded by the European Commission.

For more information please see the Political Digest March 2018

Tags: Economics | Finance | Politics |

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