The Czech Association of Mineral Waters, in collaboration with experts in healthy nutrition, has issued a compelling appeal to the government and lawmakers, urging them to reconsider a proposed increase in the value-added tax (VAT) rate for bottled natural mineral and spring waters, infant water, and medicinal water. In an open letter signed by representatives from 11 diverse organizations, they emphasize the importance of maintaining these items under the reduced 12% VAT rate, rather than subjecting them to the higher 21% rate. Their argument is grounded in the pursuit of a logical solution and support for a healthier lifestyle.

The Current Situation: At present, these categories of water fall under the reduced 15% VAT rate. However, the government is contemplating a consolidation package in the Chamber of Deputies aimed at merging the existing reduced VAT rates of 10% and 15% into a single 12% rate. In this context, the government, under the leadership of Prime Minister Petr Fiala (ODS), has proposed reclassifying these waters and transferring them to the higher 21% VAT rate.

Protests and Pleas: Numerous associations and experts are vociferously protesting this decision, urging the government and lawmakers to reconsider their stance. Their argument encompasses not only the positive health effects of mineral and spring waters but also the fact that food items, including sweets and chocolates, will be subjected to the reduced VAT rate.

The Unintended Consequences: Raising the VAT rates on these healthy food items is expected to result in higher prices for products that have demonstrated beneficial effects on human health. Paradoxically, this move would reduce the prices of other foods, including snacks and sweets. This shift appears incongruent with the principles endorsed by states and experts, and it raises concerns of inconsistency and inexplicability.

The Appeal for Balance: The appeal has garnered support from various organizations, including the Nutrition Advisers Alliance, Nutrition and Nutritional Care Section, and the Trade and Tourism Union. They argue that while experts agree on the adverse health effects of excessive sugar and unhealthy fats, it is perplexing that such foods will become even more accessible, while essential mineral, spring, and infant waters would see a 6% increase in VAT, resulting in a 40% hike in VAT payments compared to the current rates.

The Political Landscape: The categorization of mineral water and infant water for VAT rates has been the subject of substantial debate within the government coalition itself. While some, like the Pirate Party, advocated including infant water and diapers in the reduced 12% VAT rate, their proposal was outvoted. Similarly, the opposition party ANO proposed a lower VAT rate for infant water, diapers, and draft beer during discussions on the consolidation package in the Chamber of Deputies.

The Path Ahead: The proposed law is currently awaiting its final third reading, during which its ultimate form will be approved. Parliament members have submitted a total of eighty proposals for amendments to the package. The appeal from experts and organizations underscores the importance of balance and consistency in taxation, particularly when it comes to products that impact public health and well-being.

Article by Prague Forum