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Taxation of Still Wine in the Czech Republic

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  • Marek Šmíd

Abstract

This paper deals with the taxation of still wine in the Czech Republic. The aim of the paper is to quantify the fiscal impact of the imposition of a non-zero excise duty rate on still wine on excise and value added tax revenue. The paper uses an analytical approach to assess the impacts using data collected on consumption, production and price of wine and elasticity of demand under several alternative tax rates. The results show that taxation of still wine has significant potential to increase tax revenues for public budgets. Tax revenues would increase by an amount between 4.7 and 5.3 billion CZK if the tax rates on still and sparkling wine were aligned. Moreover, several recommendations are formulated to remove the advantage of still wine over sparkling wine, while at the same time allowing support for small wine producers who would be more affected by taxation than large producers.

Suggested Citation

  • Marek Šmíd, 2025. "Taxation of Still Wine in the Czech Republic," Prague Economic Papers, Prague University of Economics and Business, vol. 2025(2), pages 187-213.
    • Handle: RePEc:prg:jnlpep:v:2025:y:2025:i:2:id:892:p:187-213
    DOI: 10.18267/j.pep.892
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    References listed on IDEAS

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    1. Pogue, Thomas F & Sgontz, Larry G, 1989. "Taxing to Control Social Costs: The Case of Alcohol," American Economic Review, American Economic Association, vol. 79(1), pages 235-243, March.
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