Document 168 - Amendment to the Act on Value Added Tax - RJ

The Bill amends the VAT Act and introduces a new second reduced rate of 6% in addition to the existing basic rate (21%) and the first reduced rate (12%). This rate is to apply to selected essential goods, in particular basic foodstuffs, drinking water, infant and baby formula and sanitary items for women and children, to increase their affordability and mitigate the effects of inflation. The law also modifies the related provisions and annexes of the VAT law, which newly distinguish between the first and second reduced rates and precisely define the goods falling under the 6% rate. The measure is expected to reduce tax revenues of public budgets by approximately CZK 5.9 to 7.5 billion per year.