When looking for economic policy instruments in the times of economic crisis, even tax instruments are considered, particularly the changes (increases) of the value added tax rates. Most of the EU member states have two VAT rates, while foodstuff s and non-alcoholic beverages are included under a reduced rate. If increasing the reduced VAT rate, the signifi cance of the foodstuff or non-alcoholic beverages in the consumer basket, the regression of the VAT in these commodities and the signifi cance of the impact on households should be considered. Th is article tries to point out this issue by analyzing the impacts of changes in the VAT rates, or the actual VAT paid by the average households in the Czech Republic in the period from 2005 to 2010.Key words: value added tax, vat rates, changes of rates, consumer basket, tax burden, foodstuff s and non-alcoholic beverages Value added tax (VAT) is a general indirect turnover non-duplicate tax on the final consumption of goods and services, which is the only permissible general tax on consumption in the European Union. Its development is strongly specific and very difficult to compare with the history of other taxes. The VAT is considered as a modern, simple tax in its basic application, with large potential tax revenues with the elimination of the tax burden levied on the taxpayers (Tait 1988, p. 352 or Cnossen 1998 An area that is not clearly resolved either in theory or practice is the existence of different VAT rates, or the existence of a different number of the VAT rates. The usual, or expected practise of the only non-zero VAT rate (Schenk and Oldman 2007, p. 136) is accompanied by the presence of other reduced rates in many countries.After complicated discussions, the model with two types of the VAT rates -standard and reduced -is considered as a basic fundamental VAT model in the EU. However, the conclusions of the European Union emphasize the necessity of a further harmonization of the member states' attitudes towards the VAT rates and the tax bases, so that the relationships among the countries could be considered as transparent and flexible. Currently the VAT rates are considered to be highly diverse and relatively complicated (Study on reduced VAT applied to goods and services in the member states of the European Union, p. 52; or Bogetić and Hassan 1993, pp. 7-9).However, the basic rules for the application of the VAT rates are simple: goods and services subject to the VAT are taxed at least by 15%, while the individual member states may apply the reduced VAT rate on goods and services enumerated in the Council Directive 2006/112/EC on the common system of the value added tax 2 (Široký and Kovářová 2010, pp. 128-130); nevertheless, this rate is not less than 5%.This practice is used in the vast majority of member states; only Denmark has used a single VAT rate for a long time. If there exists a reduced rate in the particular country, it is applied on food products (including non-alcoholic beverages), which are the main subject of this article.The...
