Czech Finance Minister Alena Schillerová announced on Twitter that: “The government has just approved a long-awaited Tariff package for tobacco, hard alcohol, and gambling taxation by the Ministry of Health and the National Drug Coordinator. It responds to the increase in their availability as a result of rising living standards in the Czech Republic.”
The changes, effective from January 1, 2020, are a response to recommendations going back several years from the Healthy Ministry and also from international bodies like the World Health Organisation (WHO) and the Organisation for Economic Co-operation and Development (OECD).
Schillerová explained the logic behind the changes: “Our country has made considerable progress in combating addiction in recent years. We all remember the weed-filled housing estate or the smoky restaurants and public areas. Even in 2012, there were an incredible 75,000 vending machines in our country, and 7,500 gaming rooms, and cigarette smoke accompanied us at every turn. Measures that have significantly eliminated these negative phenomena are returning us to the civilized world, but expert figures show that we must remain active. The increase in excise duties not only reduces the availability of addictive substances, but also raises funds to support prevention projects.”
Concerning gambling, the Treasury proposes raising the rate from 23% to 25% for a partial tax on odds betting, totalizator games, raffles and small-scale tournaments, and from 23% to 30% for lotteries, bing and live games. They will also make several other smaller changes to the taxation and regulation of other types of gambling games.
The changes should raise about CZK 10 billion a year for 2020 and 2021. However, the plans have met with some opposition; the Civic Democratic Party (ODS) supports the rises in tax on cigarettes and alcohol, but argues that other taxes should be reduced at the same time, and TOP 09 disagrees with the tax increases altogether. Both parties accused the government of trying to get more revenue from taxpayers because it is running out of money. In addition, trade bodies representing bookmakers and producers of tobacco and spirits argued that tax increases will lead to expansion of the black market and price increases.
Source: Brno Daily