Euro currency crisis forces tax rises
The Czech Republic has increased its Value Added Tax rate from 20% to 21% from I January 2013. It had only increased it to 20% from 19% in January 2010.
The reduced VAT rate will also rise from 14% to 15%. This will then be split in January 2015, with some goods moving to a new 10% reduced rate.
It was originally proposed in 2011 that the standard and reduced VAT rates (currently 14%) would be brought into line at 17%. This would include a widening of the tax base to help fund the cut to the higher, standard rate. However, this has now been dropped.
The Czech government is struggling to keep its deficit close to the Euro currency entry level of 3% of GDP. It has been hit by the slow down across its crucial Western Europe markets.
Many EU member states have been forced into VAT rate rises following the 2007/08 financial crisis and subsequent Euro crisis, including: UK, Finland, Romania, Poland, Ireland, the Netherlands, Hungary, France, Spain, Greece.
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