The Czech hotel and restaurant sector has reported CZK 8.2bn in losses over the past four years. By comparison, in the four years before the crisis hit, 2005-2007, the sector generated a profit of CZK 1.2bn. The sector reported its biggest loss in 2008-9, posting a CZK 5bn decrease in profits. However, in 2010-11, the sector improved its performance by CZK 2m. Meanwhile, the total amount of income tax paid by these businesses has fallen dramatically since 2006.
In 2006, Czech hotels and restaurants paid a total of CZK 736m in income tax. Last year, however, businesses in that sector paid CZK 332m in income taxes. The total volume of tax returns has been gradually falling over the past two years. “The drop is caused by a delayed reaction to the crisis in which tourism in the Czech Republic was in 2009. But it could also be a reaction to a hike in VAT rates above all from restaurants and hotels that have been tackling a decline in their sales for four years now,” analyst Jaromír Beránek of Mag Consulting told ČTK.
