Lawmakers from across the political spectrum elected in the South Moravian Region are protesting against introducing a consumption tax on wine. They warn of small winegrowers’ potential destruction and competitiveness loss due to increased bureaucracy. The National Economic Council of the Government recommended the introduction of a consumption tax on so-called silent wines as part of a consolidation package, which Prime Minister Petr Fiala wants to present in mid-May.
“I say no to a consumption tax on wine. I fear it would mean the liquidation of winegrowers in our region, especially in South Moravia. And that is because of the administrative burden because they would have a lot of new obligations. Moreover, it is often about small winegrowers, where winemaking is passed down from father to son, so it would be a huge shame to complicate their lives like this,” said KDU-ČSL MP Miroslav Zborovský, who was elected in the South Moravian Region.
There is no consumption tax on silent wine in the Czech Republic, and sparkling wines are taxed at CZK 23.40 per liter. Beer and spirits are also taxed. Silent wine is the only alcohol on which no consumption tax is levied.
The NERV recommended taxing silent wine, stating that the estimated revenue to the state budget could be four to five billion crowns. However, Zborovský warned that it would reduce the competitiveness of Czech winegrowers. Taxed wine is not subject to consumption tax in Germany, Austria, Hungary, Italy, Slovakia, or Spain. Furthermore, wine production in the Czech Republic would also decline, and tax revenues would not be as high.
KDU-ČSL MPs Antonín Tesařík and Jiří Horák also oppose the consumption tax on wine. They argue that the tax on personal income should be increased instead of a consumption tax on wine. “These tax adjustments will not solve the problem anyway. The funds should also come from the progressive taxation of the wealthy, one of the lowest in Europe. Economic experts from the OECD also recommend this,” warned Horák.
“Increasing the tax on personal income and introducing progressivity is, in my opinion, the right path to finding money for the budget. Low-income earners would not feel it, and obtaining 40 to 50 billion crowns is possible,” Zborovský added.
Introducing a consumption tax on silent wine has caused significant controversy among Czech lawmakers, and the proposal will likely face further scrutiny. The debate has focused on whether introducing a consumption tax on wine would increase revenues for the state budget while not harming small winegrowers. Critics argue that introducing the tax would be counterproductive and undermine the competitiveness of Czech wine producers.