Instead of raising rates, Kirill Juran presents 4 specific proposals on how to bring more money into the budget. These are steps that are cheap, fair, highly effective, and the state could easily implement them tomorrow.
Gamification and a Simple "Thank You"
Do you know what happens in the Czech Republic when you honestly pay 150 million crowns in taxes? At best, absolutely nothing. At worst, the tax office will call you and launch a random audit.
When you pay for Spotify, you get a yearly summary of the music you listened to; YouTube sends commemorative plaques to its creators—in short, every good service provider tries to show appreciation to its customers.
But the state is also a service provider. It’s one big subscription model that is almost impossible to cancel. And yet, it has all the data. How about sending a simple "thank you"? Or maybe showing some interesting statistics that would make people feel valued? The biggest taxpayers could receive a letter: "You are in the TOP 100 in the Czech Republic. We appreciate you; your taxes built a kilometer of highway this year." Soon, a competitive spirit would awaken in taxpayers, and with it, the desire to honestly pay their taxes.
Ending the Chaos: Certainty for an extra fee
Uncertainty and confusion are a huge cost for business. Today, complex tax questions often lack a clear answer, and legislation changes on the fly (just look at the recent confusion surrounding the tax exemption on the sale of company shares).
What solution do we propose? Binding tax consultations. Let's give companies the opportunity to discuss complex transactions with the authorities in advance and obtain an absolutely binding ruling. Let it be subject to a fee, even a very expensive one. Big businesses will gladly pay a premium for certainty because dealing with the risk of misinterpreting the laws and facing subsequent penalties is much more expensive.
International Tax Competition
The Czech Republic should actively compete with other countries for affluent "customers"—that is, taxpayers. While Estonia doesn't tax reinvested profits, and Italy or Switzerland offer wealthy foreigners a fixed tax (the so-called flat tax), the Czech Republic is letting immense value go up in smoke.
Yet, Prague is a premium and safe location. However, we desperately lack an aggressive tax product for "High-Net-Worth Individuals" from abroad. Attracting a wealthy foreigner here with a fixed tax of 10 million crowns a year would mean not only pure profit for the state coffers but also a massive contribution to the economy through their personal consumption and VAT.
Improving UX and Reducing Bureaucracy
The user-friendliness of communicating with the state is tragic. While every e-shop tries to simplify the purchasing process to as few clicks as possible, state forms feel like deciphering codes.
An absurd example is the property tax. Through the land registry, the state has complete data on exactly what and where you own. Yet, it forces you to file a tax return, figure out coefficients, and waste time. The state should calculate the vast majority of these taxes automatically in the background and simply send people a notification with a QR code for payment.
Summary
The proposed changes don't pull more money out of anyone's pockets; they simply make paying taxes a slightly less traumatizing experience. If the state starts treating taxpayers as valued customers rather than subjects, it will ultimately collect much more revenue—without unnecessary stress on both sides.
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