Today, the lower house of Parliament is scheduled to begin voting on a series of government-proposed public-finance bills, a major component of the government's effort to combat the state’s dire public deficit. The reforms call for, among others, a decrease in the corporate-income-tax rate from the current 31% to 24% by 2006, and for an excise-tax increase.
Also, the approval/rejection of the reforms could determine the fate of the current government, which has only a single-seat majority in the lower house. The currency and the bond market will, therefore, closely watch the voting for this reason too. From the point of view of domestic equities, only Unipetrol could be directly influenced due to its impending privatization. A possible corporate-income-tax reduction would positively affect all equities; an excise-tax increase on cigarettes is expected to negatively affect Philip Morris CR's performance next year.
Jiří Soustružník