The three Czech governing parties on Wednesday reached an agreement on cutting the VAT on medicines, books, baby napkins and baby food from 15 to 10 percent as of the beginning of 2015, announced Czech Prime Minister after the Coalition Council meeting.
"We've agreed on one of the important parameters of implementing the coalition pact in the tax area," said Bohuslav Sobotka. "We've agreed on reducing the VAT on medicines, books, baby nappies and indispensable baby food."
Sobotka said the 2015 budget bill should boost the economic growth as well as employment, and enable the state's smooth functioning without the deficit crossing the three percent limit.
The government has asked the finance minister to incorporate this agreement, which corresponds to the parties' plan in the coalition pact, in the 2015 state budget bill.
This measure means there will be several billion dollars shortfall in revenue of the state budget.