Czech mineral water producers splash back against proposed tax hikes

While some food products will be receiving a tax break under new legislation, mineral water would see a six percent increase in value-added tax. Staff

Written by Staff Published on 27.08.2023 16:03:00 (updated on 28.08.2023) Reading time: 2 minutes

The Czech Mineral Water Association (Svaz Minerálních Vod) has strongly criticized the government's decision to increase the value-added tax (VAT) on natural mineral water, spring water, infant, and medicinal water to 21 percent, it says in a statement released today.

The association argues that this move is illogical and unjustifiable, putting healthy beverages at a disadvantage against less healthy options. The controversy arises as the Czech government aims to revamp its taxation structure, a decision that has raised concerns about the impact on public health and consumer behavior.

According to the proposed changes, the VAT on specific food items, including mineral and baby water, would rise by six percent to reach the 21 percent mark, a stark contrast to the current scenario. Meanwhile, other food products would enjoy a reduced VAT rate of 12 percent, down from the current 15 percent.

"On one hand, the government's proposal results in higher prices for products that have proven benefits for human health," says Jana Ježková, Chair of the Mineral Water Association, expressing concerns about the government's approach.

"On the other hand, it reduces the cost of less nutritious foods, including snacks and sweets. This disparity seems counterintuitive, especially considering the ongoing efforts to encourage responsible dietary choices among the population."

The debate surrounding the tax increase intensifies due to the ongoing warm weather and increased need for hydration. The Mineral Water Association cited data from the Czech Hydrometeorological Institute, revealing a rapid increase in the number of tropical days in the country.

Experts argue that as the frequency of hot days rises, maintaining adequate hydration and mineral levels becomes even more critical to prevent health complications.

"The decision to impose a higher VAT on unflavored water appears more as an oversight or a mistake, rather than a deliberate strategy to support the state budget," reads the official statement from the Czech Mineral Water Association. They urge policymakers to reconsider the approach and prioritize the health and well-being of citizens.

The proposal to include unsweetened water in the lower tax bracket was discussed during a government meeting on August 23. However, despite the support of some parties within the government coalition, the proposal failed to garner the necessary backing from all parties involved.

This decision has sparked further discussions about the fairness and overall impact of the new tax structure. The reaction from the Mineral Water Association highlights the broader challenges that policymakers face in creating a taxation framework that aligns with both financial and health-related goals.

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