BRATISLAVA, March 28, (WEBNOVINY) – The Slovak Association of Beer and Malt Producers does not understand why the Finance Ministry has returned to the idea of a potential excise tax increase on beer. Beer producers are aware of the lack of money in state coffers but president of the association Roman Sustak believes that more complex solutions must be sought. “The price of beer is already on the rise because the price of barley, the core input material, grew 40 percent last year. If an increase in excise tax is added, the burden on brewers will be profound,” he stated.
The ministry dusted off the idea of an increased excise tax on beer within budget outlines for 2012-2014. This move is expected to bring in nearly EUR 37 million to state coffers in the next three years. The rate is to come up by the same scale as was planned last year, when the Cabinet had intended to hike the excise tax by 22 percent with small brewers and by 27 percent with big ones. However this scheme failed in parliament because four KDH deputies refrained from voting.
The association expects a debate to be opened on this topic. “We definitely want to talk about it. But I have to say already now that we are not very happy. I do not see a lot of room for a compromise from our point of view,” Sustak commented on the prepared changes. In addition to this, the rates are disputable because the association has calculated that the ministry would have to raise the excise tax by 17-18 percent to acquire the announced EUR 8.2 million for the state budget. Nonetheless, Sustak admitted that unless the ministry changes its opinion, brewers will consider resuming certain unpopular actions from the past, such as petitions and protests.
Slovakia should not take the path of tax hikes, Sustak asserts. This track lowers consumption and leads to a decline of state revenue. He mentioned a radical excise tax hike from 2003, which resulted in a steep fall in consumption, as an example. “Beer excise tax in Slovakia represents 2.5-fold the EU minimum rate. Compared to the Czech Republic, it is nearly twice higher, while we started at the same level in 1989,” Sustak commented on excise tax rate development.
SITA