November 29, 2016 / 8:55 AM / a year ago

Czech energy group EPH may challenge Slovakia tax increase

BRATISLAVA, Nov 29 (Reuters) - Czech energy group EPH, a major player in Slovakia’s energy sector, said it may challenge Slovakia’s plans to double a special tax on profits in state-regulated industries and to keep the levy in place for longer.

The Slovak parliament last week approved plans to increase the special tax on profits in industries such as energy and telecommunications, to 8.7 percent from January, to help the government cut its budget deficit.

“If the law enters into force in January we will consider challenging it in court,” EPH spokesman Daniel Castvaj said.

EPH, a private company, owns Slovak gas pipeline operator Eustream and is a key stakeholder in Slovakia’s biggest electric utility Slovenske Elektrarne, in which it will take majority control in the coming years as part of a deal with Italy’s Enel .

It also controls gas distributor SPP-Distribucia and electricity distributor Stredoslovenska energetika.

The tax was introduced in 2012 to raise state revenue amid a global downturn and was supposed to end this year but parliament has backed government plans to keep it in place indefinitely. The tax rate should gradually decline from 2019 onwards.

Slovakia’s finance ministry has said the tax will raise 167 million euros ($177 million) next year.

It is part of government plans to cut the deficit to achieve a balanced budget in 2019. ($1 = 0.9440 euros) (Reporting by Tatiana Jancarikova; Editing by Susan Fenton)

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