RPT-Czech govt approves reform package, but faces battle

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PRAGUE, April 3 (Reuters) - The Czech cabinet approved a package of reforms late on Monday aimed at cutting spending and taxes in order to narrow the budget deficit next year, a government spokesman said.

The spokesman, Martin Schmarcz, gave no further details.

Ministers had previously said they would make details of the final approved reform package public on Tuesday, following Monday's cabinet meeting.

The government wants to cut the fiscal deficit toward 3 percent of gross domestic product from 4 percent expected this year.

The centre-right cabinet has so far floated an idea to cancel the current personal income tax brackets and unify tax at a lower, 15 percent level, albeit from a broadened tax base.

It is also mulling cutting the corporate tax gradually to 19 percent in 2010 from 24 percent.

The preferential rate of value added tax would be lifted to 9 percent from 5 percent, while the base rate would stay at 19 percent. Cuts are planned in welfare benefits and sickness insurance.

The government will face a tough battle to push its plans through the lower house of parliament, where it holds just 100 out of 200 seats. (For a FACTBOX on planned measures, click on [ID:nL26523666])