CZECH REPUBLIC - The unification of value added tax (VAT) rates at 20 per cent could have a negative impact on Czech international exhibitions and events if new economic proposals are ratified.
The current lowered VAT rate for food, medicines, accommodation services, books, public transport, culture and social care stands at 10 per cent, while basic VAT rate stands at 20 per cent.
However the act of unifying VAT could push hotel prices to new highs, adding new costs to events held in the country. Prague is home to the Incheba (pictured) and Letnany Exhibition Centres, with both venues looking for investment to bring it in line with more modern European competitors.
Longer term, finance raised by the increased rates could be used to help grow the MICE sector in the Czech capital.
According to Czech finance minister Miroslav Kalousek, the public sector should gain roughly Kc58bn (US$3.36bn) annually from the change in VAT rate, a change Marek believes could generate up to Kc70-75bn.
The rise in VAT rate on accommodation services would cause “great problems” to Czech incoming tourism, said spokesman of the association of Czech travel agencies (ACCKA) Tomio Okamura.
The Czech Republic cannot afford a sharp rise in accommodation prices, he added.
Opposition parties have expressed their disapproval at the unification of VAT rates.
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