PRAGUE (Reuters) - The Czech government is planning to prop up state budget revenues by introducing a special tax on multinationals, Prime Minister Andrej Babis was quoted by a daily newspaper as saying on Saturday.
Its central budget plans for this year and next show expected deficits of 40 billion crowns ($1.76 billion), or 0.8 percent of gross domestic product (GDP), a year, versus a broadly even balance or surpluses in recent years.
Weaker growth is forcing the center-left government to cut spending and find new income to reach that goal.
“We will implement a digital tax for multinational firms which do business in the Czech Republic but don’t reside here,” Babis said in an interview published by the daily Lidove Noviny.
Babis did not name any company that would be affected by the tax or say at what level it should be set, as this was still being negotiated with Finance Minister Alena Schillerova.
The government is also looking for savings after the Finance Ministry cut the GDP outlook for the coming years.
It even signaled that the country may see its public finances - which include the central and regional budgets, plus other funds - plunge into deficit for the first time since 2015.
Reporting by Robert Muller; Editing by Jan Harvey