The Czech Republic's Tax Policy in International Comparison

The data on the economic development of OECD member countries show that it is not the total tax rate influencing the taxed subjects but the differences in tax rates between the taxed groups, sectors and countries. The lower tax rate causes bigger or smaller tax savings; it is however accompanied by the reduction of public expenses. The tax structure in all developed countries is changing, but in the long run the share of taxes on GDP goes up as well as the share of public expenditures on the GDP. The international comparison is difficult, because the national economic indicators can be distorted by the methods used for GDP measuring on the one hand and by the tax revenues assessment on the other hand. E.g., the tax/GDP ratio is underestimated in some countries owing to vast and hidden "tax expenditures" as the tax deductions, rebates, and the like. The space for the Czech tax policy is influenced by above-mentioned tendencies in OECD countries. Moreover, it is simultaneously limited by the tax structure, tax co-ordination, harmonisation and fiscal objectives of the European Union as integrated economy involving the CR in the near future.