The Czech government has stopped financing the second wave of digitisation in the country.
In a statement reacting to the move, the public broadcaster Ceska Televiza (CT) says it threatens the availability of FTA TV and at the same time is in breach of a 2016 government commitment. It adds that the government has approved a so-called tax package, which also changes the way VAT is calculated for CT and its radio counterpart CR. The funding – CZK350-400 million (€13.6 -15.6 million)for CT and CZK120 million for CR – was in the case of CT intended to finance the second wave of TV digitisation. Following legislation in 2016 guaranteeing these funds, CT last year launched in good faith investment in digitisation and also signed contracts for the operation of new networks.
Commenting on the latest development, CT’s DG Petr Dvorak said: “Despite our warnings and relevant arguments by renowned tax advisors, the Treasury has pushed for a change in the law. This violated the principle that, until 2021, Czech Television will invest VAT revenues in digitization. If the amendments are approved by parliament and the government does not come up with any compensation solution, it will have a significant impact on the digitization process. People can watch FTA TV broadcasts every day, and in the effort to find the necessary finances we will discuss limiting the range of services offered by Czech TV. Such money simply cannot be found in savings. Just as an example, CZK400 million is equivalent to the funds spent on producing new programs for CT: D and CT art in two years”.
CT notes that the possibility of VAT deduction for public service media is not contrary to European law.
Amendments to the law that CT discussed with the Ministry of Finance before adopting the tax package and which would not stop the financing of the second wave of digitization were fully in line with European directives.