According to the Czech Chamber of Commerce (DPH), a reduction or remission of value added tax (VAT) on energy would not be of major importance for companies. For them, VAT is only a “continuous” item, to which they claim a deduction when filing a tax return. A reduction in the renewables fee in the price of electricity would be more effective. State-guaranteed loans for entrepreneurs affected by the energy crisis are only a complementary solution, according to Ladislav Minčič, director of the DPH Legislation, Law and Analysis Department.
The previous government of Andrej Babiš (ANO) proposed the exemption of electricity and gas from VAT in connection with the sharp rise in energy prices. The ANO movement continues to push for this measure and today wanted to put the debate on rising energy prices on the agenda of an extraordinary meeting of the Chamber of Deputies. However, it did not get enough votes in the vote.
Prior to the start of the Chamber of Deputies, the Minister of Labor Marian Jurečka (KDU-ČSL) told reporters that the Czech Republic cannot afford a comprehensive solution, such as the waiver of VAT on energy. According to him, this would mean a loss of revenue to the state budget of between 25 and 30 billion crowns. In addition, it would not be a comprehensive solution that would help those most in need, he added.
Minčič pointed out that a possible general price regulation would require the approval of the European Commission. It would also affect many small energy producers and suppliers. “A separate price agreement with the largest producer according to the current Slovak model has, in addition to the need to resolve the conflict with EU law, also a problem in relation to the interests of minority shareholders, because the largest Czech energy company is not a state-owned enterprise,” he said.
Companies with energy costs ten or more percent of their total costs will be able to take advantage of state-guaranteed loans. Loans of one to ten million crowns will be available to them, and the state will guarantee up to 80 percent of the principal for them. He will set aside a billion crowns for the help that will work as part of the expansion of the Guarantee program at the National Development Bank. The Minister of Industry and Trade Jozef Síkela (for STAN), who presented this measure today, stated that it should satisfy about 1,800 applicants.
According to Minčič, state-guaranteed loans help companies that are in a desperate situation, which forces them to consider obtaining now expensive loans from commercial banks. In general, the measure can be perceived as an additional step to a more substantial solution, he added.
In its survey, the Confederation of Industry and Transport of the Czech Republic found that 43 percent of member companies had their energy costs increased by more than 20 percent.
Source: CTK
