The Czech government has been discussing imposing a windfall tax on excessive profits in the energy and banking sectors since the summer, weighing on markets. The Finance Ministry has proposed the charge apply to earnings between 2023 and 2025.
On Wednesday, though, some officials in junior ruling parties said the five-party coalition had agreed to include 2022 profits as well, which jolted investors before the government later clarified it was still aiming for a 2023 start.
Electricity producer CEZ fell more than 6% at one point on Wednesday and lost 17.5 billion crowns ($700 million) in market capitalisation that day, closing at an 11-month low. But since, the stock has jumped almost 10%.
"Trust is the fundamental value that every capital market aims for in its investors," Prague Stock Exchange chairman Petr Koblic wrote in a commentary in financial daily Hospodarske Noviny.
"Let's not repeat the mistakes of Great Britain, which played with this trust in recent days - and it cost the country billions."
On Thursday, Liz Truss quit after the shortest, most chaotic tenure of any British prime minister, forced out after attempting to introduce a radical economic programme, thereby hammering the country's reputation for financial stability.
Czech banking stocks were also hit on Wednesday, though they too have recovered their losses.
Finance Minister Zbynek Stanjura has said applying a windfall tax from 2023 was the safer option even if a 2022 start was legally possible.
He told Seznam Zpravy on Friday that the aim to start in 2023 was still valid. "What the coalition partners said was rather a mistake in communication," Stanjura said in an interview for the news website.
Prime Minister Petr Fiala on Thursday also criticised the miscommunication.
The Czech government is putting a windfall tax in place to fund measures such as a cap on electricity prices, aimed at easing the impact of Europe's energy crisis on its citizens.
($1 = 25.0650 Czech crowns)
(Reporting by Jason Hovet and Robert Muller; Editing by Hugh Lawson)
