(Adds PM comment)
PRAGUE, April 11 (Reuters) - Czech Finance Minister
Zbynek Stanjura wants to overhaul the value-added tax system,
raising VAT on some items including hotels, water, beer and
heating, as the country seeks to lower its budget deficit, state
TV reported.
The reforms, which Czech Television called the biggest in
eight years, would combine the current two lower VAT rates of
10% and 15% under a 14% rate, while maintaining the top level of
21%, it reported.
The changes could raise 24 billion crowns ($1.12 billion)
for the budget next year, it said in a Monday evening report,
which included some direct comments from the minister.
The finance ministry did not reply to a request for comment.
Prime Minister Petr Fiala said on Tuesday that plans published
in the media were not final.
"I will personally announce final proposals on the topic of
lowering the budget deficits (resulting) from expert and
political debates in about a month," Fiala said.
"Our coalition wants to look for potential savings primarily
on the side of the state and only after that in people's
pockets."
Czech TV reported that under the changes, which still face
debate in the five-party, centre-right coalition government,
services like lodging, water, sport and cultural activities that
are currently taxed at lower rates would move into the 21%
bracket.
The government is looking for around 70 billion crowns in
budget savings or indirect tax increases to cut next year's
deficit from a planned 295 billion crown gap this year, seeking
to do its part to quell inflation running above 16%.
Stanjura told Czech TV that tax items would be judged on
whether "there is a societal reason to consume more of these
services".
"All others are up for debate," he said. Stanjura aims to
have tax legislation in parliament by June.
The government took power at the end of 2021 aiming to rein
in debt levels that remain well below European Union averages
but have grown in recent years at one of the fastest rates in
the bloc.
But higher spending needs due to Russia's invasion of
Ukraine and state aid necessary to ease the impact of soaring
energy costs on households and firms have hit its plans.
The central state budget gap should fall by 65 billion
crowns in 2023, although the overall fiscal gap is expected to
rise to 4.2% of gross domestic product, remaining above EU
rules, according to ministry forecasts.
($1 = 21.4930 Czech crowns)
(Reporting by Jason Hovet and Jan Lopatka; Editing by Nick
Macfie, Angus MacSwan and Jan Harvey)
