EET hurting Czech farmers markets

Many vendors are dropping out due to new electronic reporting requirements

Finding fresh fruit and vegetables at the farmers market is becoming more difficult. Some vendors have canceled their stalls due to the new legal requirements for electronic records of sales (EET). The law, which took effect at the end of 2016, requires some sales to be immediately registered with the Financial Administration so a unique code can be included on a printed receipt. The law is being phased in but already covers catering, accommodation, and some retail and wholesale business.

Organizers of farmers markets contacted by daily Mladá fronta Dnes (MfD) said that several vendors have already dropped out, and they fear that more will leave as the EET requirements continue to be phased in to cover more types of vendors.

Jan Holba, an organizer of the markets in Jihlava, told MfD that 90 percent of vendors are no longer interested in participating in the markets and that some markets had to be discontinued.

Craft fairs are also registering a drop in interest from vendors, with dozens of percent of vendors no longer interested.

One organizer of markets said that interest from vendors had fallen between 20 and 70 percent across the country, and that some markets would close.

The drawback for some vendors is the technical demands and costs of implementation of EET. This particularly bothers older vendors and ones who are less technically savvy. Another group of vendors is the ones with high turnover such as pastry vendors. The EET requirements to register the sale of each pastry with the central database and issue a printed receipt with a unique code slows down the sales.

Jiří Němec from the firm Leonet, which organizes dozens of markets per month, told MfD that he has never seen a market season start as badly as this year. He said the incomes many vendors get from the markets is so low that investing money into implementing EET is not worth it for them.

Some people make crafts on evenings and weekends as a hobby so they can sell them for a little extra money. These people will not be interested in taking on the complications of EET, and the types of folk crafts they make could disappear, and the folk culture along with them.

The Finance Ministry says that these concerns are exaggerated. There are point-of-sales EET products that are user-friendly and suited to people who aren't technically savvy, spokeswoman Michaela Tesařová told MfD. Finance Minister Andrej Babiš (ANO) previously said the cost of implementing EET was so minimal that it would not drive vendors out of the market.

Some craft markets have not seen a significant a decline so far, but that is because the EET requirement does not yet apply to primary producers of some products. Farmers and craftsmen selling goods they make themselves will fall under EET rules in the third phase, which starts March 1, 2018. Market organizers fear that once farmers are required to register sales, they too will drop out as many small farmers struggle with this type of technology. When the farmers see how vendors this year are struggling with EET, they will not be interested in taking on the challenge, market organizers said.

Tereza Uhlíková of the cultural department of the České Budějovice City Hall said that unless something changes, the Christmas and Easter markets could come to an end in that city. Holiday markets are a big driver of tourism in the winter and spring.

The implementation of EET saw protests in the Czech Republic in December. People said that if Finance Minister Andrej Babiš wants to reduce the gray-market economy he should attack something other than self-employed people. The government said that the EET will prevent tax evasion, while the opposition parties claim that the system will cause many small entrepreneurs to go out of business, and as a result it will not be effective in raising more tax money. When the EET system launched in December 2016, several hundred small rural pubs closed as they did not want to install the internet connection required to register each sale. Brewer Plzeňský prazdroj confirmed that orders from many small pubs had stopped. Critics said that many of these pubs were not paying all of their taxes and were also paying wages under the table.

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