Publication details

Is Ad valorem Property Taxation a Solution for the Czech Republic



Year of publication 2021
Type Chapter of a book
MU Faculty or unit

Faculty of Law

Description The role of the immovable property tax in the Czech Republic is marginal. The main problems would appear to be related to low revenue and inefficient administration systems. The issue of low revenue could be resolved by adopting an ad valorem tax base. However, if the Czech government does not want to increase the immovable property tax revenue, there is no real incentive to implement an ad valorem system, as it is expensive to establish, administratively demanding and time-consuming. The immediate solution for the Czech Republic is that the unit system (area) tax base should be retained. There should be one maximum tax rate in the legislation for every type of property, and municipalities should have the right to introduce their own specific tax rates below that level. As there are more than 6,250 municipalities in the Czech Republic and many of them are extremely small with a very low number of inhabitants, there should be another rate (standard rate) in the legislation for those municipalities that do not set their own specific tax rates. A positive motivation to pay taxes is a conditio sine qua non to receipt of optimal revenue. The best advertisement for the tax payment is a proper use of tax revenues in the public interest and the supply of effective, efficient and desirable services.
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