Milan Bakeš, Jakub Vojtěch


The aim of this paper is to discuss tax law instability in the Czech Republic, its causes and related aspects and to propose possible solutions. The authors first describe the current economic situation and the main problems that, in times of economic prosperity of the Czech Republic, pose a burden especially to the business environment. These problems include in particular the complexity and instability of the Czech tax law framework. Afterwards, the authors offer a brief description of the tax system of the Czech Republic accompanied by an explanation of what can be regarded as taxes in a narrower and broader sense. This is followed by an examination of the frequent amendments to the two important Czech tax laws, the Act on Income Taxes and Act on Value Added Tax, that serve as an example demonstrating the instability of Czech tax legislation. The authors conclude that the current legislative situation is characterized by an absenting longterm vision as well as a lacking moderate and thoughtful approach of Czech lawmakers, which inevitably results in inconsistent tax laws. Another cause of tax law instability might be hidden in the residue of the former etatism, perhaps surviving to a certain extent to this day in the form of a presumption that any problem has to be solved by law; where, therefore, an adopted legal regulation does not meet the initial expectations, the legislator tends automatically to respond with yet another amendment. This leads into a never-ending process of re-amendments. Finally, an example of the existing solutions is discussed and authors’ suggestions that include specific measures in the tax-legislative strategy and an adjustment of the tax system are presented.


taxes, instability, Czech Republic, tax system, reform

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