Farmers announce protests over plans to slash diesel tax rebates and new wine tax

The Czech Republic will see another round of protests against the government’s austerity measures. Agriculture industry leaders on Wednesday announced they would block roads and slow traffic in protest of plans to cancel tax rebates on diesel for agricultural firms, and a planned introduction of a tax on wine.

Photo: Tomáš Adamec

In an effort to keep the state budget deficit below 3 percent of GDP in the coming years, the Czech government is planning to save up to 1.6 billion crowns by discontinuing tax rebates on diesel for agricultural firms. Another three billion crowns should come from a consumption tax on still wine that could be introduced next year.

Farmers and wine producers have threatened to prevent these measures with intensified action and on Wednesday, they announced the details of their protests. Jindřich Šnejdrla is deputy head of the Agricultural Chamber, a Czech industry group.

“We have revived a scenario we came up with some years ago. On the same day and at the same time – on May 23 at 9 AM – members of our affiliate organizations will launch protest rides with tractors and other farm vehicles on roads all over the Czech Republic.”

Jindřich Šnejdrla

Farmers now get 60 percent of consumption tax on diesel reimbursed. They argue should the government go ahead with the plan to slash this program, the Czech Republic would be the only EU member country where agricultural firms pay full price for diesel, which would have a devastating effect on their competitiveness.

For their part, winemakers warn that introducing consumption tax on wine would hinder production and could lead to black market dealing. In effect, revenues for the state budget would be negligible.

Agriculture industry leaders say they are still hoping they will reach a deal with the government rather than having to take the matter to the streets. Jindřich Šnejdrla again.

“We have sent a letter to the prime minister but he has not gotten back to us. We have also been trying to arrange negotiations with the government and it might happen. We do want to reach agreement – but one that will be included in a bill. We don’t want to go through this every year.”

The Czech Agriculture Ministry has backed winemakers in their fight against the Finance Ministry’s intentions to tax wine. But the government stands firm on the issue of diesel tax rebates. Meanwhile, farmers’ representatives have warned more protests will follow if the government does not reconsider its plans.