VAT rates have gradually become an important fiscal policy tool of of EU member states. This paper quantifies the influence on the VAT revenue of the potential transfer of selected labour intensive services from the standard to a reduced VAT rate in the Czech Republic. The data used for the analysis were obtained by a questionnaire, as well as through research performed at the General Financial Directorate and the Czech Statistical Office. To analyze the data, a comparison analysis and descriptive statistical methods were used. The change in VAT rate would cause a decrease in VAT revenue up to 1.6 billion CZK per year, but it would also bring positive effects, especially in the business development of the suppliers of labor intensive services. It could also prevent a price increase during the planned introduction of the e-sales system in restaurants.
The Czech Republic is a typical representative EU Member State which has several times changed VAT rates during the analyzed period 2007-2014 in an effort to consolidate the public budget. These changes are reflected in household spending, which were analyzed by means of the consumer basket, the composition of which is also undergoing changes. Another factor that has an impact on household expenditures is the transfer of commodities between the reduced and standard rate of VAT. The final factor used is the differentiation of households according to their income levels. The aim of this paper is to determine how these changes took effect in the Czech Republic in the share of consumption of commodities included in the standard and reduced VAT rates and in exempt transactions according to household income groups in the analyzed period 2007-2014 and to determine the impact of these changes on the tax burden on selected households by value added tax and confirmation of the assumption of VAT regressivity.
Member States of the European Union in the period of years 2007-2013 increased the rate of value added tax several times in an attempt to consolidate public budgets. While the Czech Republic is a typical representative of country changing VAT rates several times, Slovakia made practically only one change in the VAT rate. On the other hand, the Slovak Republic is a country where the reduced rate is applied only to the minimum of commodities. Changes in VAT are naturally refl ected in household expenditures which are analyzed by the consumer basket, whose composition is also a subject of changes. Another factor that has an impact on household spending is swapping commodities between the rates of VAT. The aim of this paper is, based on the analytic-synthetic methods, to determine how are these changes diff erently manifested in the Czech Republic and the Slovak Republic in reference to the share of commodity consumption included in the standard and reduced VAT rates and to the exempt transactions, and, in particular, to determine how they aff ected the VAT burden of the hypothetical household in both countries.
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