Czech rightwingers eye speedy corporate tax cut

...percent in 2008, two years earlier than the government has proposed.

ODS deputy Michal Doktor told Reuters the right-wing party would ask its two smaller centrist coalition partners to consider an immediate cut in the corporate income tax rate from current 24 percent in parliamentary talks in coming weeks.

The government's proposal sees the tax rate levied on company profits falling to 22 percent next year, 20 percent in 2009 and 19 percent in 2010.

The cabinet's fiscal package cutting social and discretionary spending and overhauling taxes cleared an initial vote in the lower house of parliament earlier this month.

The ODS's announcement shows the draft legislation will come under heated debate for changes in the final parliamentary two readings, as such demand is likely to be resisted by the party's coalition partners, the Christian Democrats and the Greens.

Christian Democrat Finance Minister Miroslav Kalousek has said in Czech media that any deeper tax cuts must be offset by savings, which will be "extraordinarily difficult" to fund in the cash-strapped budget.

Doktor said the ODS would also aim to win their partners for a sharper lowering personal income tax burden than the government had proposed. He declined to elaborate on specifics.

The cabinet wants to introduce a flat 15 percent tax rate on all personal income calculated from a broadened base as of 2008 to replace the current progressive tax scheme with brackets from 12 percent to 32 percent.

Government parties control only 100 seats in the 200-seat lower house and it has yet to be seen if they manage to secure approval of reforms which Prime Minister Mirek Topolanek insists are needed to avoid a fiscal blow-out.