MPs back plans to introduce another VAT rate
The lower house of Parliament on Wednesday backed draft legislation introducing a third rate of the value added tax. If approved, the proposal, put forth by the government, would establish a 10-percent rate that would apply to books, medicine and baby food, as of January 2015. The Czech Republic currently has two VAT rates, 21 and 15 percent, respectively. The government believes a third, 10-percent rate would lower the prices of the selected goods, benefiting mainly families with children. Opposition leaders criticized the plan as hypocritical, and instead suggested the existing VAT rates should be lowered. A final vote on the proposal in the lower house is scheduled for later this week.