The Czech Finance Ministry submitted plans to start taxing global internet giants from the middle of 2020, proposing a 7% rate on targeted advertising, multilateral digital interface use and user data sales, it said on Thursday. The tax will apply to revenues from online advertising, the sale of user data, and intermediation services, and will only target companies with a global turnover of 750 million euros or more with sales in the Czech Republic of at last 50 million crowns (1.9 million euros) per year. The tax could raise state revenue of 2.1 billion crowns for the 2020 budget and 5 billion crowns annually after that. “Internet giants do not pay taxes in our country to an extent that would match their profits, which is unfair to other companies in the Czech Republic that pay taxes,” said Finance Minister Alena Schillerová. “We have long supported the search for a common international solution, but unfortunately negotiations at EU and OECD levels will take some time. And because we can no longer wait and see the unequal competition of global giants with other entrepreneurs, we come up with our own temporary digital tax adjustment until an international compromise will be found.” The Czech Republic...
Czech Prime Minister Andrej Babiš said on Tuesday that he would withdraw the nomination of Michal Smarda and propose a new Cultural Minister to President Milos Zeman immediately after the coalition Social Democratic Party has the new name, according to local media reports. Zeman previously said Smarda is not competent for the post of cultural minister. On Monday, Smarda decided to give up the nomination. Babiš said he had asked President Zeman to quickly solve the problem concerning the nomination of Culture Minister so that the cabinet could be complete and functional. Communication preceding the proposal of the new candidate must be better than it was in the case of Smarda, Babiš added. The dispute over the replacement of the Culture Minister has been lasting for more than three months in the country. In April, former cultural minister Antonin Stanek dismissed National Gallery head Jiri Fajt and Olomouc Art Museum head Michal Soukup, triggering criticism from cultural fields. In May, Babis proposed that Stanek be dismissed and Smarda as his successor. Zeman was reluctant to dismiss Stanek at first but eventually did so at the end of July without accepting the nomination of Smarda.
The European Commission has accused Czech mobile phone operators O2 and T-Mobile as well as the Czech telecom infrastructure provider CETIN of breaching EU antitrust rules. The move by the European Commission could make it more difficult for telecoms operators to do similar deals to share networks, seen as key to saving costs and reducing time in the face of regulatory barriers to mergers. The European Commission said the deal, which the country’s two biggest mobile operators and Cetin struck in 2011 and subsequently expanded, may breach the bloc’s competition rules. The network sharing agreement now covers all mobile technologies including 4G and 85% of the Czech population. “We have concerns that the network sharing agreement between the two major operators in Czechia reduces competition in the more densely populated areas of the country,” European Competition Commissioner Margrethe Vestager said in a statement. The EU competition enforcer, which opened an investigation in October 2016 and can hand out fines up to 10% of a company’s global revenue, said the deal may remove the incentives for the two operators to improve their networks and services. T-Mobile CZ, O2 CZ which is a unit of Czech investment group PPF, and Cetin can ask...
The Czech Republic had by far the lowest unemployment rate in the European Union in June, at just 1.9 percent. Next was Germany with a rate of 3.1 percent. According to Eurostat, all of the countries of emerging Europe boasted unemployment rates lower than the EU average of 6.3 percent, except Latvia, where 6.5 percent were unemployed. The region’s best performers aside from the Czech Republic were Hungary (3.4 percent), Poland (3.8 percent) and Romania (4 percent). Greece had the highest unemployment in the EU, at 17.6 percent. In the last decade, the highest annual unemployment rate in the EU was seen in 2013 (10.9%). Youth unemployment rate — under-25s — fell in both the EU28 and EA19. The EU28 has 3.17 million young unemployed persons, of whom 2.25 million were in the EA19. “In June 2019, the youth unemployment rate was 14.1% in the EU28 and 15.4% in the euro area, compared with 15.2% and 17%, respectively, on June 2018,” Eurostat said. Meanwhile, the preliminary flash estimate for July 2019 showed euro area annual inflation at 1.1% downed from 1.3% in the previous month, it said.
President Milos Zeman will leave for another part of his summer holiday on Thursday, from which he will come back in mid-August, spending the time mostly at the presidential chateau in Lany, central Bohemia, his spokesman Jiri Ovcacek said. The holiday is to begin on August 1 and will last “approximately until mid-August,” Ovcacek said. Zeman already took holiday in late June, early July this summer when he stayed in his house in Nove Veseli, south Moravia, after visiting the Vysocina Region. He interrupted his holiday because of the dispute around the replacement of the culture minister. Early in May, Mr. Babiš and the Social Democrats requested the removal Mr. Staněk, whom they accused of being ineffective. At the same time, they asked to replace him with the Social Democrats’ pick Michal Šmarda. The delay led the Social Democrats to threaten to leave the government coalition. President Zeman thanked Mr. Staněk for his good work and for having unveiled corruption in the field of culture but has not so far agreed to make any new appointment, saying he would decide on Staněk’s successor in mid-August. Author: red
The City of Prague has undertaken an inventory of its housing fund and the apartments it owns. The analysis showed that the city, along with the city districts, manages over 31,000 apartments. Of these 31,000 municipal dwellings, nearly 8% are currently unoccupied. The analysis also showed that the municipal housing fund in Prague is relatively small compared to other cities. For the first time ever, complete data was obtained on the city’s housing stock in all 57 municipal districts through an initiative led by the City Councillor for Housing, Adam Zábranský. An analysis by the Prague Institute of Planning and Development (IPR) showed that out of a total of 31,456 municipal apartments, 2,409 are unoccupied. Many of these empty apartments are in poor condition and would require renovation before they could be rented. Only 266 apartments are currently ready for tenants to move in without renovations. “Apartments that have not been repaired, regardless of whether they are managed by the city districts, need to be improved as soon as possible. The Affordable Housing Fund has 500 million crowns in subsidies for reconstruction, and we can offer another 500 million to city districts as interest-free loans,” said Adam Zábranský. “It is good that we are...
The Czech Telecommunication Office has published draft conditions governing its forthcoming sale of frequencies suitable for 5G mobile services, noting that reserve prices on the available spectrum mean the process should net upwards of quarter of a billion euros for government coffers and that the conditions of the sale are designed to facilitate the entry of a new player to the market. The regulator aims to auction off spectrum in the 700 MHz and 3.5 GHz bands in January next year with a view to handing over the airwaves to operators by April for use by mid-2020. Further, any incumbent operator acquiring 700-MHz spectrum will be required to provide national roaming to the newcomer for six years. However, to take advantage of this condition the newcomer will have to cover 20% of the Czech population with its own network. The regulator also outlined a series of coverage obligations the auction participants must adhere to. Finally, it noted that it has set reserve prices based on analysis of spectrum sales elsewhere in Europe. Presuming all available frequencies are sold, the state will raise upwards of 6.3 billion koruna. At the same time, PM Babiš and new Minister of Industry and Trade Karel...
After two years of stagnating beer consumption in the Czech Republic, domestic consumer interest has gone up. Some 16.5 million hectoliters of beer were consumed in the Czech Republic last year, according to the Czech Brewery and Malt Association (ČSPS). Exports of beer in 2018 totaled 5.1 million hectoliters. The biggest markets were Slovakia, Germany, Poland, and Russia. Beer exports to EU countries in 2018 increased by 10 percent and currently amount to around 80 percent of overall exports. Czech beer exports to countries outside the European Union increased by one fifth in 2018. Russia increased its imports of Czech beer by 54 percent, mainly because of the World Championship in Football. Among the new importers of Czech beer are Antarctica, Angola, Bahrain, the Bermuda Islands, Philippines, Senegal and Ecuador. For the first year, the volume of beer in tanks and legs surpasses the amount of bottled and canned beer sold abroad. On an international basis, the Czech Republic has the highest beer consumption per capita and has held that position for 25 years, as long as the independent Czech Republic has existed. Research by Japanese beer firm Kirin again confirmed the Czech leadership. Author: red
The unemployment rate fell from 2.7% to 2.6% in May, reaching a new historic low, mainly due to seasonal work The jobless rate fell as expected and the number of vacancies reached a new record, at 346,000, which is 6,600 more than in the previous month. However, job vacancies, year-on-year, are slowing down and month-on-month increases have already been significantly lower than in the previous year. Similarly, the year-on-year decline in the number of unemployed people is slowing down, though in May it fell to 200,000 for the first time. However, this development is largely related to the already exhausted labour market and the lack of suitable workers. The current slowdown in the global economy is not yet visible in the Czech Republic’s overheated labour market, which is not too surprising because the job market has a certain momentum and responds to the economy with some delay. However, signs of a slowdown are visible in the German job market, where the unemployment rate increased in May for the first time since 2013. Although two-thirds of the increase in the number of unemployed persons was due to a methodological change, this is some indication of the impact of the global slowdown on the German market. That said, we believe that the Czech labour...
More than 120,000 citizens marched in Prague on Monday to call for the resignation of Prime Minister Andrej Babiš, following ongoing public discontent and a recent decision from the European Commission (EC) that Babiš has significant conflicts of interest related to his private businesses. The decision follows an initiative from Transparency International Czech Republic (TI-CZ), which filed a complaint to the EC last year highlighting Babiš’s conflicts of interest. The complaint resulted in an audit by EC officials in the Czech Republic, an analysis of the EC’s Legal Service and, ultimately, led to the Commission’s decision last week that Czech Republic repay 17 million euro of EU subsidies that Babiš’s company received over the last two years. “It is good news not only for us as authors of the initiative, but mainly a victory for all citizens and taxpayers in the Czech Republic and Europe. Prime Minister Babiš’s unprecedented conflict of interest has been confirmed. Now the consequences of the conflict need to be resolved immediately so that the national and European budgets recuperate the costs,” comments David Ondráčka, Director of TI-CZ and member of Transparency International’s global Board. “The EU decision highlights that the rules apply to everyone, even prime ministers,”...
Tens of thousands of protesters rallied in the Czech capital Tuesday as demands intensified for the resignation of the new justice minister. The event marked a fourth week of growing demonstrations since the sudden appointment of Marie Benesova as justice minister in April. Her nomination came one day after investigators recommended Prime Minister Andrej Babis should face criminal charges for European Union subsidies fraud. She’s a lawyer and adviser to President Milos Zeman, Babis’ close ally. Zeman has repeatedly criticized prosecutors. “We’ve had enough,” and “Shame,” the crowd chanted. The populist billionaire insists the case is part of a plot by the country’s “elite” to force him from politics. He remains defiant in the face of the demonstrations. Prosecutors, who can halt the case before it gets to court, have yet to decide on police recommendations delivered last month that Babis stand trial. Benesova’s predecessor at the justice ministry resigned one day after the police wrapped up their investigation, sparking worries that political pressure might be involved. Author: red
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