• Czech government approved public finances reform yesterday. Taxes and social benefits will be changed. Current four tax rates of income tax for individuals should be abolished and instead there should be only one rate of 15% but tax will be calculated from super-gross salary. Corporate income tax should decrease to 19% by 2010. Lower VAT rate will move from 5% to 9%. Also, health and parental benefits should be cut, which would bring additional CZK
23bn to budget. First three days of sickness will not be paid at all and health benefits for illness up to two months will be lower. Parental contribution will be in three possible options depending on length of parental leave.
• Czech Republic lost arbitration case against Eastern Sugar company which accused CR that in 2003 it discriminated the company when it was distributing sugar production quotas. Arbitration court in Paris decided that the Czech Republic has to pay CZK
700m in compensations.
• Activity in manufacturing industry in the USA is increasing again, but in a more gradual pace. ISM Index decreased to 50.9 in March from previous 52.3.
• Bulgaria’s GDP increased by 6.1% last year after 6.2% growth in 2005. These figures mean that economy growth was almost the same as in the Czech Republic.