The Czech Republic was established on the 1st of January 1993, following the division of the former Czechoslovakia. The state system is based on a parliamentary republic. Legislative power is controlled by the Parliament, which consists of two chambers – the Chamber of Deputies (200 deputies elected for a 4-year term) and the Senate (81 senators elected for a 6-year term). Any and all citizens of 18+ years of age are entitled to elect their representatives. Deputies may be elected from 21 years of age while Senators may be elected from 40 years of age. Executive power is controlled by the Government, which is appointed by the President of the republic and it is responsible to the Chamber of Deputies. The President is elected for a 5-year term and must be of min. 40 years of age.
General information about Czech economy
The Czech Republic possesses a developed, high-income economy with a GDP per capita of around 80% of the European Union average. One of the most stable and prosperous of the post-Communist states, the Czech Republic has been recovering from recession since mid-1999. Growth in 2000-2001 was led by exports to the European Union, especially Germany, and foreign investment, while domestic demand is also reviving. The rate of corruption remains one of the highest among OECD countries.
The fiscal deficit is becoming a problem, with the 2007 deficit estimate having been recently raised to 4.0% of GDP from 3.3% previously. A fiscal reform plan designed to cut the deficit to 3.0% (as required for Euro adoption by the Stability and Growth Pact) has been passed by the Lower House, and expects to see the deficit fall to 2.95% of GDP in 2008.
The country is scheduled to fully implement the Schengen Agreement and therefore abolish border controls with all of its neighbours (Germany, Austria, Poland, Slovakia) as of December 2007.
The last Czech government had expressed a desire to adopt the euro in 2010, but the current government has postponed it due to budget deficits. An exact date has not been set up, but the Finance Ministry described adoption by 2012 as realistic if public finance reform passes. However, the most recent draft of the euro adoption plan omits giving any date.
Taxation
Taxpayers in the Czech Republic are subject to the following taxes:
Corporate Income Tax: 28% in 2004, 26% in 2005 and 24% from 2006
Personal Income Tax: 15-32%
Value Added Tax (VAT):5% (services and selected goods) or19% (goods and selected services)
Excise Tax: levied on petrol and petrol derivates, alcohol (beer, wine) and tobacco
Road Tax: Cars: CZK 1,200. - 4,200; trucks CZK 1,800. – 44,100.
Real Estate Tax: according to type, location and purpose of use of the real estate
Real Estate Transfer Tax: 3%
Inheritance Tax & Gift Tax: from 7% to 40% for non-related persons
Corporate Income Tax and Personal Income Tax
All Czech tax residents are subject to these taxes on their worldwide income, while Czech non-residents are taxed only on their Czech source income.
Agriculture and industry
The agriculture sector has gone through a series of crisis situations in the 90s and even today, is as highly subsidized as under the former communists’ control. The agricultural sector generates 3.5% of the country’s GDP and employs nearly 4% of the active population. The main agricultural products are sugar beets, potatoes, wheat, barley and hops. The manufacturing sector constitutes 40% of the country’s GDP and is mainly privatized. One of the principal industrial sectors in the country is the automobile sector, with Skoda (Volkswagen company) being a well know brand. Foreign investors such as Toyota and PSA have also started producing cars in the Czech Republic from 2005 onwards. However, this sector has now reached a point of saturation. The textile sector is also becoming very dynamic. The tourism sector is booming, thanks particularly to the city of Prague being a strong tourist attraction centre.
Transportation
Regarding its density, transport infrastructure is comparable with other EU states. Currently, investments in the technical upgrading of the transport infrastructure are in progress together with plans to expand the continuity of the infrastructure into the European transport routes. After 1992, the main focus in the Czech Republic has been on building motorways and urban area bypasses. Investment into infrastructure increased after the Czech Republic entered the EU, especially resulting from the availability of financial means from the EU Structural Funds.
Railways:
Total: 9,435 km
Standard gauge: 9,341 km 1.435-m standard gauge (2,946 km electrified at three voltages; 1,868 km double track)
Narrow gauge: 94 km 0.760-m narrow gauge (1998)
Èeské dráhy (ÈD) (English: Czech Railways) is the major Czech railway company.
City with underground railway system: Prague (see the Prague Metro article)
Cities with trams: Brno, Liberec, Most, Olomouc, Ostrava, Plzeò, Prague
Czech roadways:
total: 127,693 km
paved: 127,693 km (including 498 km of expressways)
unpaved: 0 km (1998 est.)
Highways in the Czech Republic: D1, D2, D3, D5, D8, D11, D47
Waterways: 677 km; the Elbe (Labe) is the principal river
Pipelines: natural gas 53,000 km (1998)
Ports and harbors: Dìèín, Mìlník, Prague, Ústí nad Labem, Moldauhafen in Hamburg (no longer operational, will be handed over to Germany in 2028)
Airports: 121 (2006)
Airports - with paved runways:
total: 46
over 3,047 m: 2
2,438 to 3,047 m: 10
1,524 to 2,437 m: 13
914 to 1,523 m: 2
under 914 m: 19 (2006)
Airports - with unpaved runways:
total: 75
1,524 to 2,437 m: 1
914 to 1,523 m: 25
under 914 m: 49 (2006)
Heliports: 2 (2006)
Telecommunication, IT and Foreign Investment
Moves to complete banking, telecommunications, and energy privatisation will add to foreign investment, while intensified restructuring among large enterprises and banks, and improvements in the financial sector should strengthen output growth. The government has recently agreed to the sale of a 7.0% stake of the energy producer ÈEZ, with the sale of the Budejovicky Budvar brewery also mooted.
GENERAL DATA
The Czech Republic has 10,269,726 inhabitants. The density of its population is 131 inhabitants per 1 km2. As far as the number of inhabitants is concerned, the Czech Republic is to be found in 14th place in Europe, after Hungary, Portugal and Belarus but before Greece and Belgium.
Nationalities: Czech 81.1%, Moravian 13.2%, Silesian 0.4% (total: 94.7%), Slovak 3.1%, German 0.5%, Gypsy 0.3%, Polish 0.6%, other 0.2%.
MACRO DATA
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