Czech state wants to tax refineries: Committee backs government proposal

The Chamber of Deputies’ Budget Committee today backed the government’s proposal to introduce an extraordinary tax on refineries. It did not adopt any amendments. The government says the tax is being introduced because refinery margins have risen as a result of conditions on the global oil market. The tax is likely to affect only the refineries in Kralupy nad Vltavou and Litvínov, which are owned by Orlen Unipetrol. MPs are expected to consider the bill at its second reading on Friday during an extraordinary session.

STAN MPs failed to push through an amendment that would also subject foreign producers exporting their output to Czechia to the tax. The importer would pay the tax. The committee also rejected their amendment to restrict the exemption from income tax for proceeds from the sale of investment apartments.

TOP 09 parliamentary group leader Jan Jakob announced an amendment for the bill’s second reading that would lower the extraordinary tax rate from 50 percent to 39.5 percent. The amendment would also remove the option of treating the tax as a deductible expense when calculating the tax base for regular corporate income tax, so that it would not reduce revenues for municipalities and regions. According to MP Vendula Svobodová, the Pirates will push for the extraordinary tax to be cut to 25 percent and extended to coal-fired power producers.