State TV stated that Czech Finance Minister Zbynek Stanjura intends to raise VAT on hotels, water, beer, and heating to cut the budget deficit.
Czech Television termed the budget-cutting measures the greatest in eight years, combining the lower VAT rates of 10% and 15% into a 14% rate while maintaining the highest rate of 21%.
The five-party, center-right coalition government must consider the amendments, taxing accommodation, water, sports, and culture at 21%.
Stanjura told Czech TV on Monday evening that “there is a societal motivation to utilize more of these services” will determine product ratings.
“The others are debatable,” he remarked.
A request for comment went unanswered by the ministry.
The government seized power in late 2021 with intentions to reduce debt and deficits.
Yet, Russia’s invasion of Ukraine and governmental help to reduce energy costs have increased expenditure demands.
To reduce inflation by over 16%, the state seeks 70 billion crowns through budget savings or indirect tax rises to minimize next year’s deficit from 295 billion crowns this year.
According to ministry predictions, the budgetary imbalance would climb to 4.2% of GDP this year, exceeding European Union restrictions.
