Czech Finance Minister Andrej Babis plans to submit to government a plan to reduce the value added tax on draught beer to 15% from 21%, local media reported on August 29.
It will be Babis' second attempt this year to push through the plan after an unsuccessful attempt in January, Radio Praha reports. The lower VAT will help partly offset the raised costs faced by pub owners in connection with the introduction of his pet project to make electronic sales registration mandatory, Babis claims. At the same time, beer prices are a traditional populist point amongst voters in the country that has the world's highest consumption per capita.
The parliament approved the e-sales registration bill in February. The bill is part of efforts to fight tax evasion and boost budget revenue, the powerful finance minister claims. However, critics cite concerns over the effect on small businesses and the conflicts of interest of the billionaire leader of the Ano party and owner of agricultural and chemicals conglomorate Agrofert.
The senior coalition partner Social Democrat Party (CSSD) responded to Babis' proposal in January with a counter proposal to cut VAT on essential foodstuffs. The right-wing opposition accused Babis of populism and pre-election campaigning.
Czech regional elections are due in October, and are viewed as an important precurser for scheduled parliamentary elections a year later. A bad tempered tussle between Ano and CSSD - incongruous bedfellows at the best of times - to gain advantage has been growing throughout the year. A recent survey by Sanep agency showed Ano has widened its lead over CSSD, but at just 23.9% the party's overall backing is well below levels that would allow it to dictate terms in any new government.
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