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Czech PM says windfall tax still an option, sees CEZ shake-up plan by 2023

By Robert Muller and Jason Hovet

PRAGUE, July 14 (Reuters) - The Czech government is still discussing a possible windfall tax to help out those struggling with big energy bills and it should have a restructuring plan in place for state-owned utility CEZ by the first half of 2023, the prime minister said.

Petr Fiala told Reuters the government was debating the idea of windfall taxes, a proposal first presented by a coalition partner, on firms that have reaped profits from surging energy prices that were pushed higher by Russia's invasion of Ukraine.

"We really do not want to raise taxes," Fiala said. "The situation is extraordinary, so it is possible to consider how to tax temporarily unexpected profits, partially at least, and use that for solidarity with those getting unexpectedly in trouble."

Fiala's five-party coalition government came to power in December promising to rein in record budget deficits without hiking taxes but is under pressure to help households and companies cope with soaring energy bills and other costs related to the Ukraine war.

Officials have said the debate on taxes, which could extend to other sectors, should be wrapped up by the end of August.

Fiala has put CEZ, in which the state has a 70% stake, at the centre of his government's energy strategy as the Czech Republic and other European states race to end reliance on Russian energy supplies.

"I see that the Czech Republic has a certain disadvantage as we have very little influence on any energy infrastructure. That must change," Fiala said in the interview on Wednesday.

Fiala, who said in June that CEZ would face a shake-up, said the authorities were discussing several scenarios for restructuring CEZ, central Europe's biggest listed utility with a market capitalisation of $22.6 billion.

He did not give details but said one idea being discussed by the ministers and the ruling coalition was the previous government's plan to split CEZ's old energy assets, such as coal and nuclear plants, from its new assets, such as renewables.

"That is definitely one of the options, but we are not there yet," he said. "The first half of next year is a realistic horizon in order to have (a plan) prepared well."

(Reporting by Jason Hovet and Robert Muller; Editing by Edmund Blair)