1. Fiscal policy and taxes in the Czech Republic
VOŠ – 2. Ročník – 1. semestr

2. Fiscal policy
is a set of principles and decisions of a government about public expenditure and how that expenditure is financed
it includes government spending, government borrowing or taxes
all these items help to stimulate or slow down the economy
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3. Instruments of fiscal policy
Expenditure - governments spend money on things such as the military, police or services like education and healthcare
Transfers of payments are welfare benefits (social benefits, sick pays, pensions)
Taxation
Borrowing money from the population causing a fiscal deficit
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4. National budget
is a plan of the intended revenues and expenditures of a government
A budget deficit happens when a government spends more money than it takes in, the opposite is a budget surplus
the budget can be balanced
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5. Taxes
are financial charge which an individual or a legal entity must pay to the state
taxes are used to finance public order, economic infrastructure, public works, social engineering, welfare and public services - education systems, health care systems, pensions, unemployment benefits, public transportation
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6. Types of taxes Do you know the difference between
the items bellow, try to explain, if
not look it up on the internet.
Proportional taxes
Progressive taxes
Regressive taxes
Direct taxes
Indirect taxes
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7. Government purchases
They are a part of government spending or government expenditure
Government agencies may produce services like communications, education, emergency, entertainment, financing, fire fighting, healthcare, insurance, law, police, postal service, transport
Government may produce goods like coal, electrical infrastructure, oil, roads, bridges, tunnels, steel, water infrastructure
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8. Transfers It is a payment of money from a
government to an individual in need, they
include:
welfare
unemployment insurance
social security payments
pensions and support for students, including scholarships and financial aid and death benefits for parents
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9. Public debt is money (or credit) owed by a government
when the government spendings are higher than earnings
governments usually borrow by issuing securities such as government bonds and bills
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10. Types of taxes Corporate income tax Personal income tax
Immovable property tax
Consumption tax
Road tax
Value added tax
Inheritance, gift, immovable property transfer tax
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11. Corporate income tax
a tax imposed on the profits of companies or associations
it includes deductible items – gifts for education, culture, environment, charity or church purposes
What is the current percentage of
this tax?
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12. Personal income tax a tax imposed on the financial income of persons
they tax the total income of the individual (with some deductions permitted)
What is the current percentage of
this tax?
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13. Immovable property tax
is a tax imposed on property
it includes tax on buildings and land
it differs and according to the value of the land estate buildings (location, size etc.)
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14. Consumption tax is a tax on the purchase of a good or service
it applies to fuels, spirits, liquors, wine, tobacco products
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15. Road tax a tax paid for usage of automobiles
it is imposed on companies and individuals
the amount depends on number of lorries and personal cars
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16. Value added tax is imposed on the value added to a product
all businessmen and firms whose turnover exceeds one million in the last 12 months become VAT payers
all consumers have to pay VAT when purchasing products
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17. Inheritance, gift, immovable property transfer tax
imposed on sb. who inherits assets
the tax rate for inheritance taxes depends on the value of the property and his/her relationship to the person
a gift tax is a transfer tax imposed on the value of certain gifts
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18. Listening Taxes What are taxes in the Czech Republic used for?
Do you think that the level of our
taxes is high or low.
Which insurance is voluntary, social
or healthcare, what causes does it
have?
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19. Discussion What would happen if we stopped paying taxes?
Do all people pay income tax? Is it legal?
What would you change about taxes in the Czech Republic.
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20. Imagine the following situation
You own a small firm producing furniture. You are looking for a new worker. Will you choose a worker with trade certificate or employ a worker. Consider taxes. Discuss with your partner about advantages and disadvantages of both of them.
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21. Resources
English in Economics, Miroslav Kaftan, Libuše Horáková:, Karolinum 2004
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