Taxes and Fiscal Decentralization Public Finance B Ing. David Slavata, Ph.D.

Tax system in CZ Direct taxes Corporate tax Personal income tax Property tax Tax on equired property Inheritance and gift tax Road tax

Undirect taxes VAT Consumption taxes Alcohol tax 143Kč/litre, 285Kč/litre Beer tax from 16,-Kč/hl – 32,-Kč/hl Vine tax 23,40Kč/litre Tax on tobacco from 1,42Kč/cigarette Tax on fuel and lubricants 10,95Kč/litre, 12,84Kč/litre

Undirect taxes Ecological taxes Tax on natural gas Electricity tax 28,30Kč/Mwh Tax on solid fuels (coal) 8,50Kč/GJ

Local Fees and Charges Charge from dogs Fee from spa or holiday stay Charge from accomodation capacity Entrance fee Charge for use of public space Fee for permition to entry by car Waste disposal fee Fee for valuating of rural land into building land

Budgeting of taxes from 1.1.2017 VAT Regional governemnt 8,92% Municipal government 21,4% Central government 69,68 Corporate tax Regional government 8,92% Municipal government 23,58% Central government 67,50% Personal Income Tax (tax deducted)

Budgeting of taxes from 1.1.2017 Personal Income Tax (from self employment) Municipalities and Regions 60% Regional governemnt 8,92% Municipal government 23,58% Central government 67,50% Central Government 40% Personal Income tax (from dependent aktivity) Regional government 8,92% Real estate tax Municipal government 1000%

How to identify local government revenues Low tax revenue, not interested for central government High administrative cost of taxes for central government Unpopular taxes Other taxes

Local government revenues Local taxes (Parking tax) Tax surcharges (tax + s) User fees Revenues from own properties and companies

EU recommendation for decentralised taxation The structure of decentralised taxation should ensure adequate level of providing public goods. Local governments should be entitled to change the rates of taxes Local taxes should have sufficient yield and low administrative cost Local taxes should be a stable and forecasting Local taxes should be neutral They should not motivate for migration They should not influence the local economical structure They should not worsen welfare of low social class Central government should enable possibility for administration of local taxes for local governments

It is recommended to prevent big and quick changes of tax rates steps which complicate local tax collection prolongation in transfer of finances from central budget to local budgets insufficient informations on tax collection Technical and educational support of central government to the local governments Equal procedure for tax recovery for all of regions