EU criticizes tax evasion and high labour taxation

The economy is growing, unemployment sinking, state debt is under 60% of GDP, but Brussels is critical towards the Czech Republic.

In its evaluation report, the European Commission says that the economy of the Czech Republic is directed towards growth, but there is quite a lot to be improved in relation to the economic potential of the country.

The Commission sees persisting shortcomings in tax collection, fiscal sustainability and fiscal framework as a whole. It reproaches the Czech Republic for tax evasions and ineffectiveness in tax collection, especially in relation to the gradually growing expenses in the areas of pension, health care and long-term care policies and questions the long-term sustainability of these systems.

Brussels criticizes the low effectivity and transparency of the public institutions as well as the insufficient improvement of the entrepreneurial environment, sinking the rating of the Czech Republic in several international classifications. The Commission also reflects the low level of the transport infrastructure and energy efficiency, which is below the EU average.

The Czech Republic is not fulfilling the last year recommendations as to the lowering of labour taxation, inclusivity and quality of education, creation of high-level research and innovation system and anti-corruption measures.

The Czech entrepreneurs and employers‘ associations agree with the Commission’s report, but they criticize the stereotypes in formulating the specific recommendations and their imbalance in terms of importance in relation to the future growth and employment. They point out that the Commission’s report doesn’t mention recommendations which could improve the competitiveness of the Czech Republic, remove barriers to the investment and development of the entrepreneurial environment and reduce the regulatory load.

EU Commission's report on the Czech Republic