For the capitalists or anarchists in society, belief tends to skew towards the philosophy that government can’t do anything right. When the government gets involved it simply complicates rules, corrupts society, or brings upon us unnecessary regulation. When one adds in a populist government with some coalition partners, trying to beat off a fast growing field of challenging parties, the results can be even murkier. The question “what is going on” may arise.
The result can be seen in a social media table someone has worked out for VAT rate scenarios on beer starting 1.5.2020. There are several VAT rate categories. The issue with the approach is that when governments are flush, or need to harness votes, they can use these categories to gain popularity. The three categories, not including zero for things like rent, are 21%, 15% or 10%. A popular political item, beer, has often evaded extra excise taxes, and now the government has set out to lower the VAT rate, if certain criteria are fulfilled. Lets have a look (below you see translation of the attached picture):
New VAT rates in effect 1 May 2020
Draught beer alcoholic or non-alcoholic in an establishment – 10%
Non-alcoholic beer in a can or bottle, poured into a glass in an establishment – 10%
Draught non-alcoholic beer in a jug and taken away – 15%
Draught non-alcoholic beer in a cup (deposit or non), in a stand without a base – 15%
Non-alcoholic beer in a can or bottle without service – 15%
Draught alcoholic beer poured into a jug and taken away – 21%
Draught alcoholic beer poured into a cup (deposit or non) in a stand without a base – 21%
Alcoholic beer in a can or bottle without service – 21%
Alcoholic beer in a can or bottle, poured into a glass at an establishment – 21%
The Ministry of Finance has not challenged the table, meaning the truth is close to the statements made. They have commented that it is an extreme interpretation of the new rates going into effect.
Need we say more?