Gov’t approves support for SMEs until 2020

Transportation and other issues also taken up by the Cabinet

Prague, Nov 9 (ČTK) —The Czech government today approved the Industry and Trade Ministry’s program Expansion, under which Kč 9.5 billion (€350 million) should be provided in support of small and medium-sized enterprises until 2020, Deputy Prime Minister Pavel Bělobrádek said at a press conference after the Cabinet meeting.

The ministry has drawn up the program as part of the operational program Enterprise and Innovations for Competitiveness. Its aim is to facilitate small and medium-sized businesses’ access to bank loans, support business activities in state-supported regions and contribute to development of social enterprises.

“According to our preliminary estimate, we will provide guarantees worth up to Kč 24 billion within the programme. This will enable entrepreneurs to take loans worth up to Kč 35 billion and advantageous loans worth up to Kč 5.5 billion,” Industry and Trade Minister Jan Mládek said.

According to the ministry, this is the first program within the current programming period which will provide support in the form of financial tools instead of financial subsidies.

The program has been prepared in cooperation with the guarantee and development bank CZRB, which will also be charged with its materialization.

The government also approved the nomination of Deputy Finance Minister Jan Gregor, 40, for the post of the Czech Republic’s representative in European Court of Auditors, cabinet spokesman Martin Ayrer told the Czech News Agency.

Gregor’s appointment is yet to be approved be the budgetary control committee of the European Parliament. If it is approved, Gregor will take up the office as of May 2016.

The government also approved the Transport Ministry’s contract for purchase of 54,000 new on-board units worth about Kč 70 million for the motorway toll system from Kapsch, the tolls system operator and the exclusive supplier of the units, ministry spokesman Tomáš Neřold told ČTK.

The information on the contract was included in the program of today’s government meeting additionally since the toll system started to run out of the on-board units. Kapsch had pointed to this situation several days ago.

At present, there are 845,000 on-board units registered in the electronic toll system, their number growing by 7,000 every month. The last contract for a purchase of 54,000 new and 60,000 overhauled on-board units was approved in January.

The government today suspended discussion on Transport Minister Dan Ťok’s proposal of timetable of preparations for the planned tender to select a new toll system operator for three years after 2016, Prime Minister Bohuslav Sobotka said at a press conference after the cabinet meeting.

According to the proposal, the tender should be launched at the beginning of next year and the contract with the new operator could be signed in October the same year.

“I hope the government will be able to approve the timetable at its next meeting,” Sobotka said.

The current 10-year contract with Kapsch is expiring at the end of 2016. Unless Kapsch wins the new contract, the new operator will have less than three months to prepare for taking over the system.

According to Dan Ťok, it is possible to launch the tender even sooner. Earlier this month he said the tender could be prepared by the end of this year.

The electronic toll collection system was launched in the CzechRepublic in 2007. It covers more than 1,400 kilometers of motorways, high-speed roads and selected sections of first-class roads.

Toll revenue reached Kč 63.5 billion in January-July this year. Of the amount, Kč 16.3 billion without VAT was paid to Kapsch and its suppliers.

The government today also approved a draft amendment to the law on international cooperation in tax administration which unifies the rules for automatic exchange of tax information in line with global standards, as required by the EU.

The global standards are compatible with the US requirements for information on bank accounts (Foreign Account Tax Compliance Act, FATCA). The new amendment bill will therefore replace the current Czech law on exchange of information on financial accounts with the US for tax administration purposes.

FATCA requires foreign financial institutions to inform the US tax administrator Internal Revenue Service (IRS) about US citizens’ accounts with financial assets exceeding $50,000 (about Kč 952,000).

According to the Finance Ministry, the government wants to propose that the Chamber of Deputies pass the draft amendment in the first reading so that it could take effect as of January next year.

The government today also approved the Transport Ministry’s proposal to buy new trains using up to Kč 20 billion from European Union fund. The EU could contribute up to 85 percent, while the remaining 15 percent would be covered by the state or regions, according to information from the government’s website.

The first purchase within the program concerns six electric trains InterPanter from engineering company Škoda Transportation. In addition to these, railway operator České dráhy (ČD) has also bought eight similar trains which are not, however, financed from EU funds. The total price of all the 14 trains equals Kč 2.7 billion.

The government also approved the Finance Ministry’s proposal of a timetable of central state purchases for 2016–20. In the first stage planned for next year, the state will launch public tenders for software licenses and cars. Purchases of computers, car insurance and office paper will follow in 2017. In 2018, the ministry should prepare tenders for printers, car tires and other office supplies. Public contracts in 2020 should concern accident services for passenger cars and office furniture.

In total, the central purchases should entail goods and services worth almost Kč 13 billion.