Czech farmers seek tractor traction over tax changes

Protesting Czech farmers left the fields for the roads in a nationwide go slow protest against government moves they say will hit them hard in the wallet.

Around 1,600 slow-moving tractors and other agricultural machines ventured out onto Czech main roads on Wednesday morning to proceed at a sedentary pace guaranteed to anger most of the non-agricultural population.

The near nationwide go slow protest, excluding the largely non-agrarian capital Prague and the northern region of Liberec where farmers were due to demonstrate, is aimed at government moves to remove tax advantages on fuel used for farm machinery, including tractors, and the re-imposition of excise taxes on wine.

Czech farmers say the end of the fuel tax break could cost them up to Kč 1.6 billion, adding that the Czech Republic is almost the sole country in the European Union to have taken such a step. The Ministry of Finance, headed by Miroslav Kalousek (TOP 09), argues that the tax advantage, giving farmers the opportunity to reclaim 60 percent of the tax on agricultural fuel, forms part of a raft of tax perks and advantages that are not systematic and should go.

Kalousek has rolled out the same argument for imposing a tax an excise tax table wine, saying that there is no reason why beer should be taxed and wine should not. Against the protests of local grape growers and wine makers, mostly located in Southern Moravia, the finance minister says the step will mostly penalize the foreign makers of cheap wine favored by Czechs and local producers making wine from imported juice and concentrate.  The wine tax existed previously but was abolished after it was found to cost as much to enforce as was collected in revenues.

Czech farmers, usually a milder crop than the more protest prone French and Mediterranean varieties, have been angered that the center-right government of prime minister Petr Nečas (Civic Democrats, ODS) did not answer their invite to talk about the tax changes by the end of April. They have warned that they will intensify their action if they see no signs that the government is willing to compromise.