Why a windfall tax?

The official reason for passing a windfall tax – to use extraordinary war-related profits to cover extraordinary war-related government expenditures – is clear enough, but what is the real reason behind it? Finance Min. Zbyněk Stanjura of ODS told Týdeník Echo in July that the political cost of raising taxes is the same whether you collect a few billion crowns or whether the tax is brutal. “Regardless of the amount you raise,” he said, “they’re going to say you’ve betrayed the government’s policy statement…. If we go for it, it must truly bring in a significant amount.” Yet there are serious doubts about how much the tax will actually raise, esp. with regard to banks. Stanjura added in July, though, that “no issue is taboo.” And so when PM Petr Fiala now talks now about overhauling the government’s policy statement
early next year, the media reaction is rather subdued, because people and companies have already been conditioned to expect a turn for the worse. Thanks to the windfall-tax debate.

FW221108

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