Prague - The future of the government of Prime Minister Petr Necas is threatened as an internal rebellion in the PM's senior coalition Civic Democratic Party (ODS) continues.
The scuffle is about the government's proposed tax package that increases the Czech Republic's two VAT rates by one percentage point each, to 15 percent and 19 percent, and raises taxes for higher-income people.
The tax package faces an opposition of six ODS deputies, who say that tax hikes are against the party's electoral program.
Aktualne.cz has learned that PM Petr Necas met with Petr Tluchor, the informal leader of the rebels, but the two men failed to reach an agreement. "It was fruitless," a source close to the negotiations told Aktualne.cz.
Coalition parties suffer defeat in regional elections
Labor Minister Drabek steps down over corruption affair
"They are adamant. While at the beginning it appeared that (the rebels) were open to an agreement, now it is not so."
The prime minister's office has denied that any meeting between Necas and Tluchor took place.
Furthermore, Finance Minister Miroslav Kalousek (TOP 09) said he will ask the Chamber of Deputies to withdraw the government's 2013 draft budget, which takes into account the same tax package, so his ministry can rewrite it.
"Due to internal turbulences in the coalition ODS, the government has not sufficient support for this draft budget," said the minister.
"Swedish services for Rumanian taxes, as proposed by deputies Snajdr and Fuksa, it is simply not possible," said Kalousek in reference to the proposal of the ODS rebel deputies.
The draft budget approved by the government in September projects a CZK 100 billion (EUR 4 billion) deficit in 2013.
