Final Word from Tuesday, June 21, 2011

You'd have thought that businesses, esp. those of the FMCGvariety, would take to the streets after Petr Nečas said a rise inthe unified VAT rate to 19% might be needed if the eurozonecrisis worsens. Higher taxes mean less consumer spending,but businesses instead let Finance Minister Miroslav Kalousekdig the knife in deeper by saying that such a VAT hike wouldbe completely appropriate. Businesses are slow to realize thatin some key ways, they have more in common with the tradeunions than with the center-right government. One reasonfor the ambivalence is that so many businesses are profitingfrom the current dysfunctional system, either because theirexistence is dependent on government contracts, licenses orconcessions, or because lax government regulation creates ananything-goes environment where the consumer (the simpletaxpayer) is the ultimate loser. It would be a bit hypocritical forthese same businesses to criticize the government for wantingto get more active in the screw-the-consumer game too.

Glossary of difficult words

to screw - to cheat or swindle someone, esp. by charging too much for something;

FMCG - fast moving consumer goods; products that sell quickly and at relatively low price, including food, alcohol and toiletries;

to dig the knife in deeper - to deliberately increase the pain or to make a bad situation worse;

lax - not sufficiently strict or severe.


Tel: 420 224 221 580

Published by

E.S. Best s.r.o.
Ovenecká 78/33
170 00 Prague 7
Czech Republic



FS Final Word