EU: Czech Republic stood alone in blocking EU proposal to raise minimum excise duty on beer

The Czech Republic has blocked the European Commission proposal for the raising of minimum excise duty on beer, and Czech Minister Vlastimil Tlusty said at a news conference the country could not accept discrimination against beer as compared to wine because beer is a national Czech drink, The Prague Monitor published November 28.

There is zero tax on non-sparkling wine in the EU.

This is only for the second time that the Czech Republic stood in opposition to most other EU states.

The first such case was blocking, together with Poland, a proposal raising VAT on housing construction from 5 to 19 percent as of 2008.

"We Czechs believe that beer is a part of food. We cannot agree with such a typical Czech product being put at a disadvantage," Tlusty told the news conference.

Today's Czech "no" also means no to the other related proposals, among them a hike in excise duty by inflation every two-to-three years, and the raising of minimum excise duty on sweet wines by 31 percent.

Latvia backed the Czech stance but in the end retreated, according to diplomatic circles.

European Commission experts will now analyse the problem and excise duty on alcohol may return to the agenda in the first half of next year at the earliest.

However, it is not likely that Germany, which will hold EU Presidency then, will reopen the issue.

The Czech Republic has been fighting against the beer tax hike for months.

The European Commission had originally proposed a hike by 31 percent but after a wave of opposition rose, Finland suggested a growth of just 4.5 percent which would not affect the Czech Republic at all.

However, the Czech Finance Ministry decided to reject the proposal anyway, even after it lost Germany as an ally willing to support the Finnish proposal.

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