UPDATE 1-Czech govt scales back plan to hike sales tax

                                
 * Will raise lower VAT rate in 2012, keeps upper rate
                                
 * Will unify VAT at 17.5 pct from 2013, lower than planned
                                
 * Scraps plan to lower employers' social tax contribution
                                
 
  (Adds details)
                                
 PRAGUE, March 10 (Reuters) - The Czech government coalition
parties scaled back a plan to hike the value-added tax, agreeing
to raise the lower rate to 14 percent in 2012 instead of
unifying it with the top 20 percent rate, Prime Minister Petr
Necas said on Thursday.
                                
 From 2013, both VAT rates should be unified at 17.5 percent,
he told a press conference on Thursday.
                                
 The parties had agreed the framework of pension reform last
month with plans to unify VAT at the current upper 20 percent,
while keeping some items such as basic food at the current lower
rate of 10 percent. [ID:nLDE71R1QG]
                                
 Necas also said on Thursday the government would scrap plans
to lower employers' contribution to the social tax, which it had
estimated would cost 20 billion crowns.
                                
 Necas said the changes to VAT would bring around 26 billion
to 27 billion in revenue in 2012, and 22 billion to 23 billion
in 2013.
                                
 The government has come under fire for its plan to finance
pension reform by effectively abolishing the 10 percent lower
rate of VAT, which had been planned for October this year.
                                
 Critics point to its promise not to raise overall taxation,
and to the fact the tax increase will bring more funds into
state coffers than is needed to finance the reform.
[ID:nLDE71O1FU]
  (Reporting by Roman Gazdik, writing by Jason Hovet, editing by
Jan Lopatka/Toby Chopra)