The Council identifies the competitive strengths and weaknesses of economic policy in its annual Competitiveness Report. Issue priorities are then identified, developed and pursued by task forces comprised of experts from business, government and academics. This section of the website contains recent views and date, the full competitiveness report, and a summary of our priority issues.
Investors and business planners need a stable and predictable environment to make investments that create jobs. The public sector needs more revenue. Political parties need juicy election issues. All these needs make tax policy a critical and controversial area for recovery and prosperity. Below are the views of political party leaders and experts, as well as a analysis of the 2010 Czech government budget.

Would you support creating a long-term tax policy that would achieve cross-party consensus on direct and indirect tax levels?

Would you support creating a long-term tax policy that would achieve cross-party consensus on direct and indirect tax levels?

Would you support creating a long-term tax policy that would achieve cross-party consensus on direct and indirect tax levels?

Would you support creating a long-term tax policy that would achieve cross-party consensus on direct and indirect tax levels?

Would you support creating a long-term tax policy that would achieve cross-party consensus on direct and indirect tax levels?

Would you support creating a long-term tax policy that would achieve cross-party consensus on direct and indirect tax levels?
5 questions, 5 answers on Taxation by Jan Žůrek, Tax Lead Partner at KPMG.
Would you support creating a long-term tax policy that would achieve cross-party consensus on direct and indirect tax levels?
Would you support creating a long-term tax policy that would achieve cross-party consensus on direct and indirect tax levels?
Would you support creating a long-term tax policy that would achieve cross-party consensus on direct and indirect tax levels?
Would you support creating a long-term tax policy that would achieve cross-party consensus on direct and indirect tax levels?
Would you support creating a long-term tax policy that would achieve cross-party consensus on direct and indirect tax levels?
Would you support creating a long-term tax policy that would achieve cross-party consensus on direct and indirect tax levels?
5 questions, 5 answers on Taxation by Jan Žůrek, Tax Lead Partner at KPMG.
Indexed against the European Union average, the economic policy of the Czech Republic helped create a competitive advantage in one area- physical infrastructure- and is performing around the EU average in another two- fiscal/ monetary policy and public administration.
Economic Competitiveness| CZ | AT | SK | HU | PL | BG | NL |
| Score | 594 | 763 | 601 | 526 | 511 | 487 | 848 |
| Total | 5.94 | 7.63 | 6.01 | 5.26 | 5.11 | 4.87 | 8.48 |
| Index to EU avg.* | 0.99 | 1.27 | 1.00 | 0.88 | 0.85 | 0.81 | 1.41 |
* The score against the average score for all EU countries.
Assessment| Competitive advantage (exceeding +.15 EU avg.) | |
| Competitive (performing at +/-.15 EU avg.) | |
| Competitive disadvantage (bellow -.15 EU avg.) |
| CZ | AT | SK | HU | PL | BG | NL |
| People | 1.05 | 1.19 | 1.01 | 0.81 | 0.87 | 1.07 | 1.18 |
| GDP | 1.02 | 1.09 | 1.17 | 1.10 | 1.07 | 1.76 | 1.18 |
| Capital Accumulation | 0.83 | 1.43 | 0.66 | 0.88 | 0.59 | 0.49 | 0.96 |
| Commercial Flow | 0.57 | 2.38 | 0.26 | 0.32 | 0.59 | -0.06 | 4.12 |
| Energy Use | 1.21 | 2.88 | 0.89 | 1.19 | 0.75 | 0.74 | 1.27 |
| Total Score | 0.91 | 1.31 | 0.92 | 0.94 | 0.84 | 1.07 | 1.31 |
The percent of EU average is the index of the country‘s score against the average score for all EU countries.
As could be expected, the Czech Republic straddles the divide between Western Europe and former Soviet satellites. In 10 of 18 categories, the country is at a competitive disadvantage with the EU average. In four categories, it is competitive neutral, and in four it has a competitive advantage over the average EU country. The country‘s areas of strength indicate it has the potential for substantial competitive advances.
| CZ | AT | SK | HU | PL | BG | NL |
| Starting a Business | 1.21 | 0.83 | 1.02 | 1.34 | 0.51 | 0.63 | 1.46 |
| Real Estate | 1.00 | 0.91 | 1.12 | 0.90 | 1.00 | 0.94 | 1.13 |
| Taxes | 0.96 | 1.07 | 1.00 | 1.02 | 0.98 | 1.00 | 1.07 |
| Judiciary | 1.01 | 1.08 | 0.93 | 1.00 | 0.89 | 0.93 | 1.15 |
| Capital Markets | 0.86 | 1.00 | 0.90 | 1.04 | 0.95 | 1.13 | 1.13 |
| Insolvency | 1.18 | 0.97 | 1.10 | 0.87 | 1.00 | 1.05 | 0.84 |
| e-Government | 0.98 | 1.08 | 0.73 | 1.11 | 0.78 | 0.91 | 1.41 |
| Labor Law | 0.79 | 1.00 | 0.94 | 1.04 | 1.06 | 0.97 | 1.21 |
| IPR | 1.04 | 1.00 | 0.93 | 1.05 | 0.91 | 0.94 | 1.13 |
| Competition | 0.96 | 1.08 | 0.93 | 1.11 | 0.90 | 0.83 | 1.20 |
| Total Score | 0.89 | 0.96 | 0.93 | 1.05 | 1.00 | 1.17 | 1.00 |
The country score indexed against the average of the seven countries in the comparative group.
The Czech Republic receives high marks for the quality of its legislation. In bankruptcy and commercial registration- both recently reformed with intensive involvement of private sector experts- the country has a distinct competitive advantage. In seven chapters of legal reform, the country performs at the comparative group average. Only labor law is a competitive disadvantage.
| CZ | AT | SK | HU | PL | BG | NL |
| Cost | 1.14 | 0.99 | 1.14 | 0.79 | 1.08 | 1.53 | 1.27 |
| Efficiency | 0.81 | 1.41 | 1.11 | 0.99 | 0.73 | 0.91 | 2.22 |
| Total Score | 0.96 | 1.22 | 1.12 | 0.90 | 0.88 | 1.19 | 1.79 |
The percent of EU average is the index of the country‘s score against the average score for all EU countries.
In 3 out of the 7 cost indicators, Czech public administration costs less than its EU peers. Both effective personal tax rates and interest costs as a percentage of total government revenue are significantly lower than the EU average. The total tax rate- both as a percentage of GDP and profit- in the Czech Republic are about average. In two areas, however, the country has dangerous disadvantages: social contributions and government deficits.
| CZ | AT | SK | HU | PL | BG | NL |
| Communication | 0.75 | 1.04 | 0.72 | 0.76 | 0.63 | 0.45 | 1.56 |
| Land | 1.11 | 0.61 | 0.90 | 1.64 | 1.13 | 1.50 | 0.20 |
| Energy | 1.09 | 1.56 | 1.10 | 0.85 | 0.86 | 0.00 | 1.01 |
| Transport | 1.62 | 1.62 | 1.55 | 1.35 | 0.43 | 0.60 | 1.93 |
| Tourism | 1.95 | 1.26 | 0.84 | 0.76 | 1.12 | 0.60 | 1.93 |
| Total Score | 1.21 | 1.34 | 1.08 | 1.02 | 0.71 | 0.47 | 1.37 |
The percent of EU average is the index of the country‘s score against the average score for all EU countries.
The country has a competitive advantage in 5 of the 15 indicators, a neutral score in 3, and a disadvantage in 7.
| CZ | AT | SK | HU | PL | BG | NL |
| Labor Force | 0.75 | 0.86 | 0.60 | 0.80 | 0.94 | 0.72 | 1.15 |
| Education | 1.05 | 1.14 | 0.95 | 0.95 | 1.01 | 0.67 | 0.94 |
| Commercialization | 0.48 | 1.40 | 0.23 | 0.39 | 0.27 | 0.20 | 1.63 |
| Total Score | 0.81 | 1.14 | 0.66 | 0.76 | 0.78 | 0.54 | 1.18 |
The percent of EU average is the index of the country‘s score against the average score for all EU countries.
Twenty-one indicators were selected. The country has a competitive advantage in two, and a disadvantage in 12. It is doing reasonably well in traditional education, but is far behind in training and education after university. The labor force works long hours, but at a lower productive per hour worked. Not enough of that work force has a university education, and the number in high tech manufacturing is below ever other comparative country except Austria. The ability to convert education into commercial research success is poor; although test scores are high, the country is 90% below the EU average in patent applications.
| CZ | AT | SK | HU | PL | BG | NL |
| Access to Capital | 1.10 | 1.61 | 1.14 | 0.53 | 0.84 | 0.64 | 1.68 |
| Stability | 0.93 | 1.60 | 1.58 | 0.77 | 1.40 | 0.73 | 1.61 |
| Total Score | 1.05 | 1.61 | 1.26 | 0.60 | 1.00 | 0.66 | 1.66 |
The percent of EU average is the index of the country‘s score against the average score for all EU countries.
Whatever it is called, this area has been an area of competitive strength for the Czech Republic. In 3 of the 7 indicators, the country achieved a competitive advantage. In only one indicator did the country perform well below the EU average- interest rate spreads- and, given what we now know of the credit bubble, perhaps even this area might be considered a strength in retrospect.
The Council analyzes its annual Competitiveness Report and identifies strategic economic policies that would increase the country's competitiveness. The Council forms task forces of experts from all areas of society to debate and develop effective proposals in each priority area. In September 2009, the Council delivered a seven-point issue recommendation to the leaders of seven political parties- CSSD, KDU-CSL, KSCM, Obcane, ODS, Strana Zeleny, and Veci Verejne- and requested meetings with party leaders to discuss these issues:
Download 2009 Policy Recommendation
English version I Czech version
The country rightfully places much pride in its intellectual heritage. To maintain this advantage in the future, the government will need to take strong step in both education and research so that the country can achieve its place among the world’s elite. To succeed, a new policy needs to educate tomorrow’s graduates in the skills required by a knowledge economy.
More...The government's lack of a clear position concerning euro entry makes business planning difficult, if not impossible.
More...This country spends more money on energy for every unit of growth than most other countries in the euro. As a result, money that could be put in the pockets of Czech citizens ends up flowing to oil and gas producing countries. Every effort should be made to make both industrial production, commercial offices, and residential use more efficient.
More...The government should introduce new measures to monitor spending and to eliminate inefficiencies caused by conflict-of-interest, duplication of services, and other sources.
More...The next government should achieve a cross-party consensus on the labor code, and attempt to modernize the code so that it has the flexibility to function well both in office and factory environments.
More...Both sides of the political spectrum have contributed to today's competitive tax rates. The further evolution of tax policy should be established across party lines to ensure consistency, and changes should focus on eliminating the gray market by simplifying the system.
More...Tourism is one of the keys to quick recovery and long-term prosperity. The government needs to have more cohesive and better funded policy to promote the country and invest in necessary tourism infrastructure.
More...The council monitors economic policy developments in the Czech Republic and abroad so that policymakers can have a better understanding of trends and innovations.
More...Prague City Council, 19 October 2010
A properly defined, contracted and controlled public service:
= absence of incompatible State Aid prohibited by the EU
= a condition for the effective achievement of quality and legitimate prices for public services for the public sector and service users
The voters of the Czech Republic delivered a clear, hard blow to the political abdomen this weekend. They knocked the two giants of the right and left down on their knees. They pushed the traditional kingmaker- KDU-CSL- clear out of parliament. Two of the most prominent politicians- Jiri Paroubek and Pavel Bem- resigned party functions.
1990 may have marked the return of multi-party democracy, but 2010 could signal the arrival of an active and aware electorate.
Final Survey Report by Donath-Burson-Marsteller and The Fleet Sheet’s Final Word.
The Council has been established as a forum for debating and advocating improvements in economic policy. The Council is open to contributions from entities and individuals from all parts of society.