The government wants war tax savings. It will create uncertainty, boost profits, experts warn |

Next week, the government will decide to introduce a temporary tax in the Czech Republic. The so-called windfall tax does not apply to all companies, and profits at times of high inflation are supposed to be taxed only on select companies from the energy and banking sectors. But economists don’t have much faith in the intentions of this country – how to get extra money. According to them, the introduction of the tax will bring uncertainty to the Czech market and force companies to avoid it in various ways.

Windfall tax, special tax, war tax – this instrument is mainly relevant for the UK. It was first introduced in 1981 by the Prime Minister’s Iron Lady. Margaret ThatcherIt was a 2.5% tax on bank profits that profited from very high interest rates.

In the late 1990s, the same tool was used by the Tony Blair administration. She has imposed it on her more than 30 private companies, including energy companies.

In May of this year, the Boris Johnson Cabinet introduced a 25% tax applicable to oil and gas companies. “Rising oil prices and Natural gas Russia’s aggression against Ukraine is part of the reason,” then-British Finance Minister Rishi Snack commented on the cabinet’s decision.

Similar words can be heard from the mouth of Czech Finance Minister Zbyněk Stájula (ODS). “Today we are observing a rather extraordinary phenomenon where some companies are making very high profits as a result of the current economic conditions,” he explained last week. In an interview with Weekly Economwhy the government is considering introducing a tax.

“Please note that profit is not obscene to me; on the contrary, business is done with the aim of achieving it. (Energy and Banks – Editor’s Note)is that we are making high profits because of externalities,” added Stanjura.

A tax on unexpected profits should affect businesses in the sectors mentioned, but not all businesses. These should be dozens of large companies.

Finance Ministry spokeswoman Michaela Lagronova confirmed to Aktuálně.cz that the government needs to decide on measures by the end of next week. Stajura defends the tax, saying this money should not disappear somewhere in the budget as part of current spending, but should be used to manage rising energy prices. , adding that this is only a temporary measure.

There is a risk of making profits abroad, experts say

However, experts are skeptical of this tool. “Tax on Extraordinary Profits or Classical Departmental Tax (The difference is that the first mentioned tax does not necessarily apply industry-wide – editor’s note) It’s not an ideal way to get extra income for the public budget,” says V4 Group tax expert Michal Jelínek.

He described the measures as so-called unsystematic interventions in the tax system, which would give the companies involved an incentive to optimize their taxes. is. It also allows companies to export profits abroad.

“Various creative ways of optimizing taxes are widespread in the Czech Republic, and the introduction of a tax on special profits only supports this activity. If the government feels that companies are making excessive and disproportionate profits, they will take them with a one-time administrative action rather than a permanent one by changing tax laws,” Jelínek said. recommends.

Roklen economist Pavel Peterka also described the special profit tax as an unsystematic measure with many negative consequences. He mainly highlights the decline or loss of domestic and foreign investors’ confidence in the stability of the Czech business environment and tax system.

“Fear of repeating similar alarming and unsystematic solutions could divert foreign and domestic capital to neighboring countries, which will require huge investments over the next few years as planned. It will be a particular problem for the energy sector, which will become a global economy, and change it towards the European Union’s green goals,” points out Peterka.

Deloitte economist David Marek also points to the turmoil in the Czech business environment. He said the government’s move would add to uncertainty for taxpayers as new taxes pop up all of a sudden. In such cases, basically no company can be sure that the tax environment in the Czech Republic is stable, ”Marek is convinced.

Budget needs new resources

Experts say the measure could go unnoticed if it were only a temporary measure, as Stanjula argues. “The economy will survive if the cabinet sticks to the fact that it is only a temporary measure, but it would be more appropriate to look for long-term systemic changes in the balance of the state budget,” Marek added. increase. .

Peterka also acknowledges that at a time when budget deficits top 200 billion crowns and spending is higher than in the turbulent year of 2020, the government will need to look for new sources of funding to fund the state coffers. . “A blanket tax increase on households and businesses plagued by the current crisis is now out of the question. So the government’s interest in taxing a sector that has been unusually successful in these circumstances is understandable to some extent. So we have to look at all the pros and cons,” said the economist.

However, there are many unclear points about the special tax. Also, its calculation method, rate and thus yield are not clear.

Finance Ministry spokeswoman Lagronova did not comment on the question of what percentage the tax would reach. Stanjula only said that the budget’s potential revenue could amount to tens of billions of crowns. An analysis from the beginning of the month recommended a tax rate of 40-60%.

Coalition agreement on tax system introduction

It is also not clear what special taxation certain companies in the above three sectors should be subject to. But no doubt it applies to his ČEZ group, which represents the largest energy group in the Czech Republic. But Akcenta analyst Miroslav Novák thinks it would be easier in this case if the state allowed his ČEZ to pay his 100% dividend.

Banks should not avoid taxes from the sector under consideration. According to economist Tomas Havranek, it is clear that the Czech National Bank is making money “without working” thanks to rising interest rates. “They collect money from their customers, pay 1% on average, and deposit that money with the Czech National Bank, usually at 7%. Yes, there are costs associated with regulation and own operations, but they still make money. You can do so much now without doing any additional productive work,” says the expert.

If the Cabinet approves the introduction of the tax, the bill could go through the legislative process by the end of the year. According to Marian Yurechka (KDU-ČSL), Minister of Labor and Social Affairs, there is consensus on that within the union. Stanjura previously said that among the five ruling parties, his ODS had the most complex debate on whether to implement this measure.

According to Novak, the biggest paradox is that the introduction of a special tax is being considered by right-wing governments and the ODS Finance Minister. “This clearly shows how desperate we are in terms of the state budget,” the analyst concludes.


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