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.
- Policy. The next parliament should approve a long-term tax policy with cross-party consensus. To help achieve consistency on taxation, the government could consider making all changes to the tax code subject to a supermajority vote of two-thirds of all parliamentarians. A new policy should be accompanied by a better modeling system, so that future tax changes can be based on a better assessment of potential revenue gains or losses.
- Income Tax. A long-term agreement on tax rates is imperative. If the tax is to be progressive, the difference between rates should not be higher than 5%. Deductions and exemptions should focus on 1) take-home pay for individuals with below-average incomes and 2) on government policy aims such as energy efficiency and education.
- Excise Tax. Any attempt to increase this tax or expand it to other products must weigh the increase in black and gray market activity.
- VAT Tax. The top rate might be lowered in the future to encourage greater consumption and to make retail more competitive with neighboring markets.
Would your party support introducing measures- such as increasing the number of votes necessary to pass tax legislation- that would force greater consensus on tax policy?
Most of the current proposals to address the government deficit focus on raising revenue by raising taxes on those who already pay. Shouldn’t the government take steps to reduce tax evasion before placing a greater burden on taxpayers? If you agree, what steps would you take?
2. PETR HAVLÍK, OBČANÉ.CZ
Would you support creating a long-term tax policy that would achieve cross-party consensus on direct and indirect tax levels?
Havlik is convinced that the inconsistent policies, moving first one way and then snapping back in the other direction, have lead to indecisiveness in the economic communities. This indecisiveness could led to the destruction of the economy.
Would your party support introducing measures- such as increasing the number of votes necessary to pass tax legislation- that would force greater consensus on tax policy?
Petr Havlík thinks that there is not such a simple answer to this question. He agrees with the opinion that fundamental economic decisions shouldn´t be passed by 101 votes in the parliament and that taxes should be viewed, more or less, as people´s or business´s investments in government, and the government should be able to show a measurable return on that investment.
Most of the current proposals to address the government deficit focus on raising revenue by raising taxes on those who already pay. Shouldn’t the government take steps to reduce tax evasion before placing a greater burden on taxpayers? If you agree, what steps would you take?
Havlik says that it is necessary to realise that there are both legal tax avoidance and illegal tax evasion. Tax avoidance may be as big or even bigger an issue than evasion. Key companies are mostly registered abroad and so they pay only basic tax rate here and the rest somewhere else. That is revenue that could be reabsorbed by a better tax policy.
Would you support creating a long-term tax policy that would achieve cross-party consensus on direct and indirect tax levels?
Radek John supports a long-term tax policy- after the economy is stabilized. The budget deficit is rising dramatically due to the crisis, and needs to be resolved before such a policy could be addressed.
Would your party support introducing measures- such as increasing the number of votes necessary to pass tax legislation- that would force greater consensus on tax policy?
John strongly supports this, but thinks that there will be problem with gaining the qualified majority for tax modification across big political parties.
Most of the current proposals to address the government deficit focus on raising revenue by raising taxes on those who already pay. Shouldn’t the government take steps to reduce tax evasion before placing a greater burden on taxpayers? If you agree, what steps would you take?
Veci verejne would like to remove corruption from the country. To achieve this, John proposes to take several steps such as testing the bribability of public officers and politicans or granting tax amnesty as has been done in Italy.
4. JIŘÍ PAROUBEK - ČSSD
Would you support creating a long-term tax policy that would achieve cross-party consensus on direct and indirect tax levels?
Jiří Paroubek thinks that it would be great if political parties would agree on such consensus. The differences between the two biggest parties in the Czech Republic are so large, however, that it makes it almost impossible.
Would your party support introducing measures- such as increasing the number of votes necessary to pass tax legislation- that would force greater consensus on tax policy?
Paroubek believes it would mean the implementation of the principle of a blocking minority what would block the financial system.
Most of the current proposals to address the government deficit focus on raising revenue by raising taxes on those who already pay. Shouldn’t the government take steps to reduce tax evasion before placing a greater burden on taxpayers? If you agree, what steps would you take?
Paroubek says it is possible to do both things at the same time. Tax evasion is a problem and Paroubek’s blames the previous government for the cancellation of the financial police.
5. CYRIL SVOBODA - KDU-ČSL
Would you support creating a long-term tax policy that would achieve cross-party consensus on direct and indirect tax levels?
Svoboda would support it, but he is afraid that it´s not possible in the Czech Republic.
Would your party support introducing measures- such as increasing the number of votes necessary to pass tax legislation- that would force greater consensus on tax policy?
Cyril Svoboda doesn´t see a reason for that. There is no certainty that increased number of votes will prevent from the change of legislation. He gives constitution as an example.
Most of the current proposals to address the government deficit focus on raising revenue by raising taxes on those who already pay. Shouldn’t the government take steps to reduce tax evasion before placing a greater burden on taxpayers? If you agree, what steps would you take?
Cyril Svoboda agrees.
6. MIREK TOPOLÁNEK - ODS
Would you support creating a long-term tax policy that would achieve cross-party consensus on direct and indirect tax levels?
Would your party support introducing measures- such as increasing the number of votes necessary to pass tax legislation- that would force greater consensus on tax policy?
Most of the current proposals to address the government deficit focus on raising revenue by raising taxes on those who already pay. Shouldn’t the government take steps to reduce tax evasion before placing a greater burden on taxpayers? If you agree, what steps would you take?
7. 5 questions, 5 answers on Taxation by Jan Žůrek, Tax Lead Partner at KPMG.
Would an agreement on long term tax policy increase investment and jobs?
Jan Žůrek is pretty sure that it would be better if there would be an agreement about taxes across the political scene. He likes tax changes from 2008 but is affraid of what will happen after next elections in May 2010.
Has the government reaction to the economic crisis increased or decreased the chances for a strong recovery?
You sit on the European tax committee of KPMG. Have you discussed whether there is, in fact, an optimal tax structure?
The Czech Republic has introduced several new concepts in taxation. Do you think these creative solutions confuse investors and diminish investment?
Is the current tax policy in line with the current economic strategy?