Pálinka distillers press for VAT cut
Distillers of pálinka, a fruit distillate that is Hungaryʼs national eau de vie, have urged the government to cut the VAT rate for the spirit to 5% from 27% to counter the impact of the public health product tax, state news wire MTI reports.
Hungarian lawmakers ended an exemption for pálinka from the public health product tax, which is applied to other alcoholic drinks and unhealthy foods, from January 1, 2019, after the European Commission stepped up an infringement procedure against the country on the matter.
The EC argued that the exemption was protectionist because such products are mostly distilled domestically.
In a statement issued on Wednesday, the Hungarian Pálinka Order pressed for a reduction in the VAT rate on pálinka to counterbalance the 60% drop in commercial sales of the spirit as the public health product tax fed into prices.
Attila Barabás, the orderʼs grand master and the CEO of distiller Győri Likőrgyár, said the application of the tax to pálinka had raised prices by HUF 500-1,000 for every half-liter bottle of the spirit.
Sales of pálinka dropped to 1.12 million half-liter bottles last year from 5.6 million in 2018, he added.
Avg Gross Earnings at HUF 605,400 in February 2024
Bulgaria's Household Income, Spending Rise 20% in 2023
Hungary, UAE Sign Defense Industry Agreement
Hungary Launches HUF 15 bln Tourism Sector Support Program
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
