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Parliament Overrides Veto, Approves Amendment to VAT Bill

The Chamber of Deputies on Thursday approved an amendment to the value-added tax (VAT) bill, overturning an earlier veto of the bill by President Vaclav Klaus and giving the ruling coalition a narrow victory.

The bill was approved by 101 of the 184 deputies present, the minimum necessary to override a presidential veto. Foreign Minister and Christian Democratic (KDU-CSL) MP Cyril Svoboda was airlifted to Prague for the vote from a Brno hospital, where he is undergoing treatment after a serious automobile accident last week. The amendment, a key part of the ruling coalition’s public finance reform plan, lowers the basic VAT rate from 22 % to 19 %, but also moves a number of goods and services from the lower 5 % bracket to the higher basic rate. Items to be transferred to the higher rate include restaurant and hairdresser services and tickets to sports events.

The ruling coalition was missing Social Democratic (CSSD) MP Miroslav Vlcek, who was unable to attend the vote for health reasons. The coalition was supported, however, by independent MP Petr Kott, who was expelled from the opposition Civic Democrats (ODS) earlier this year. Kott’s support, along with the presence of Svoboda, sealed the coalition’s narrow win.

The VAT bill, which the government expects will generate up to CZK 20 bn in state revenues, is necessary for the CR’s accession to the European Union, which is set for May 1.

The Chamber of Deputies was originally scheduled to vote on the VAT on Tuesday of this week, but the vote was postponed in light of Svoboda’s inability to take part.

(Interfax 23.iv.04)

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