Health Ministry eyes sugar tax on soft drinks for mid-2025

Health Minister Vlastimil Válek has suggested a new consumption tax on drinks with a high sugar content to combat their negative health effects. The proposal aims to reduce the consumption of sugary drinks, which have been linked to obesity and other adverse health effects. However, not all coalition parties are in agreement.

Válek says he supports the National Economic Council's (NERV) proposal to implement a consumption tax on sugary drinks. NERV suggests that the government start collecting a tax of CZK 3.4 on drinks with a sugar content of more than 50 grams per liter. For every additional 10 grams of sugar in the drink, the state would then collect a tax of CZK 0.35.

Hypothetically, under the new sugar tax, a liter of ordinary lemonade with 80 grams of sugar would become more expensive by CZK 4.5 under the new levy, Válek explained on Czech Television.

"[The tax] has very good health effects because manufacturers reduce the sugar content, and the consumption of sugary drinks goes down," said PAQ Research sociologist and NERV member Daniel Prokop.

Last year, the government increased the tax on soft drinks, many of which have excessive sugar levels. The value-added tax on non-alcoholic drinks rose from 15 to 21 percent – the government cited health reasons as partly underpinning this move. 

Minority coalition partners – the Pirates and the Mayors and Independents (STAN) parties – also support the proposal. STAN chairman of the parliamentary budget committee Josef Bernard said last week: "Sugar is bad. What is happening here with the advertising of sugary drinks is absolutely terrible, it is poison for children.”

According to data from the Czech Statistical Office, the average Czech consumes around 50 kilograms of sugar per year.

Chairman of the Pirates parliamentary club Jakub Michálek pointed out that around half of all EU states have a type of sugar tax, and recommended Czechia adopt one. 

The Civic Democrats (ODS) party, the major coalition leader, is less enthusiastic about the proposed new tax. Deputy chairman of the ODS parliamentary budget committee Vojtěch Munzar says that sugar is not the same type of vice as alcohol or tobacco, making the introduction of a vice tax on sugar hard to justify. Munzar also says that the extra levy would complicate Czechia’s tax system.

The Christian Democrats, also part of the coalition, says the proposal covers a “complex issue,” and points out the gray area of imposing a tax on sugar drinks versus one on all sugar-filled foods.

Opposition parties ANO and the Freedom and Direct Democracy (SPD) parties are against the proposal, seeing it as another way for the state to generate extra revenue while harming the ordinary Czech consumer. SPD points out that the 2023 VAT rise on soft drinks was sufficient.

Despite this opposition and mixed reaction, Válek is confident that the government coalition will agree on the new tax this year, with a potential implementation date in mid-2025. The Czech state budget currently receives around CZK 150 billion each year from consumption taxes on items such as fuel, tobacco, and alcohol.