Thursday, December 28, 2006


A newly-formed coalition of center-right political parties in Czech Republic is going in the right direction since it wants to introduce a 17-19 percent flat on both individual and corporate income. The pursuit of a single flat tax would also apply to the VAT but there are particular accomodation services and food to be applied to lower tax rate. Currently, there are four income tax levels, ranging from 12 to 32 percent, while businesses are now taxed at 24 percent corporate tax rate.

I warmly welcome efforts made by Czech policymakers as they want to pursue fighting against tax cartels. Further lowering of individual and corporate tax rates will stimulate the economy to grow faster as well as a number of jobs will soar if the flat tax comes into action. A single, low and applied flat tax will furtherly help to increase the level of the international competitiveness of the Czech Republic. Fair and transparent tax code is the best way to dynamize the labor market and productive behavior based upon the convergence of the productivity. Making business environment friendly, is a great step ahead of the global competition. The flat-tax will enhence those changes and set a solid grounding to further growth of capital formation. As a liberal economist, I write to express my support to the proposal of flat tax in Czech Republic.

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