Final Word from Wednesday, July 9, 2003
Proponents of a plan in Parliament to limit the write-off on a car to Kč 900,000 say that hot wheels are so important to Czech businessmen that the limitation won't affect sales of Mercedes, Audis, BMWs, Volvos or other expensive vehicles. It's a status thing, they argue. MP Jan Mládek of ČSSD even favors lowering the limit to Kč 600,000, because anything above this is luxury. It's nevertheless doubtful that the luxury tax will raise much extra revenue. Many cost-conscious businesspeople will settle for smaller cars, and this will deprive the state not only of VAT on the purchase price and corporate tax on car dealers, but also of excise tax on the lower gasoline consumption and income tax on the lower monthly car-benefit tax paid by employees. But MPs don't mention this, because to them it's a status thing. Those snobby businessmen are driving nicer cars than they are.