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Opposition makes last ditch effort to stop electronic tax system

Photo: Bohemist

Zero hour exemptions to EET from Babiš prompts fresh calls to abolish the system.


PRAGUE – Opposition leaders today called on the government to stop the implementation of the controversial electronic registration of sales (EET) after Finance Minister and billionaire businessman Andrej Babiš proposed a last minute exemption of the system they claim has thrown the entire system into chaos, according to local reports.

Set to come online on December 1, the EET is the government’s answer to tax evasion — connecting the cashiers of businesses to the Finance Ministry. Experts and opposition parties, however, believe that forcing small businesses to pay high sales taxes will prompt the nationwide closure of budget restaurants and shops who will be unable to compete with chain shops.

For months, the new system seemed primed to meet the December 1 deadline despite vocal opposition. Last month, the government successfully processed 43,000 receipts, announcing that all systems were go. Then on Wednesday, Babiš proposed that those who pay a flat expense write-off, along with those whose annual revenues do not exceed 250,000 Kč be exempt.

The move prompted a reaction from Prime Minister Bohuslav Sobotka and the Civic Democrats, who expressed their dissatisfaction with such a change being made just one week before the launch. The latter said today they will recommend to Parliament that the EET be shelved.

While the government will be the primary benefactor of the system by garnering greater revenue, experts believe that large companies, such as international restaurants McDonald’s Corp., Denny’s Inc. and Hard Rock Cafe International, Inc., also stand to benefit as consumers scramble to find cheaper eateries.

According to the Czech Finance Ministry, the hospitality sector is currently the fourth largest source of the country’s shadow economy, and VAT collected from bars and restaurants could go up by as much as US$382 million per year — up from just under $66 million.

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Bohemist is an upstart news outlet serving the Czech Republic. Feel free to write us at editor@bohemist.cz.

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