Tax and Welfare Reforms in the Czech Republic—Structural Implications and Challenges

Author/Editor:

Thomas Dalsgaard

Publication Date:

March 1, 2008

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The paper provides an analysis and discussion of key structural implications of the 2007 and 2008 welfare and tax reforms in the Czech Republic. Based on a detailed micro-study of marginal and average effective tax rates for individuals at various points along the earnings curve, it concludes that while incentives to save and invest have improved, work incentives are being severely hampered by high marginal effective tax rates for low- and middle income individuals. The reforms also fail to address the most pressing fiscal concern: to put government finances on a sustainable path.

Series:

Working Paper No. 08/52

Subject:

English

Publication Date:

March 1, 2008

ISBN/ISSN:

9781451869149/1018-5941

Stock No:

WPIEA2008052

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

52

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