Journal of Tax Reform
Fuels Taxation in the Context of Tax Reforms in the Czech Republic
Michal Krajňák 1,2
1 VŠB-Technical University of Ostrava, Ostrava, Czech Republic
2 Moravian Colleague Olomouc, Olomouc, Czech Republic
Abstract
The article evaluates the development of the tax burden and its influence on fuel consumption in the Czech Republic in the years 2001–2022. Petrol and diesel are subject to universal and selective indirect taxation. Using the methods of analysis, description, comparison, synthesis and regression and correlation analysis, it is analysed whether the tax burden of these products is constant despite minimal tax reforms or whether it is changing. To assess the real tax burden, the effective tax rate indicator is calculated. Input data for the analysis consists of average fuel prices and tax rates in the analysed period. Compared to the first analysed year– 2001 and the last analysed year 2022, the value-added tax rate increased by one percentage point. Selective excise duty rates also increased by about 1 CZK., The results of the analysis examining the development of the tax burden using the effective tax rate show that the tax burden on fuel is constantly changing. However, this is not due to many tax reforms in this area of taxation. The reason is mainly the unit type of tax rate for excise duties. This fact causes the increase in the price of fuel leads to decrease the percentage of tax to the total price of fuel, and the tax burden thus develops regressively. Excise duties and value-added tax have a negative effect on consumption. In the context of tax theories, one of the reasons for the higher tax burden on fuels is the limitation of their consumption. It can thus be concluded that in the Czech Republic, these taxes are fulfilled. At the same time, the high tax burden creates relatively stable revenues for the state budget. This fact confirms the importance of excise duties.
Keywords
diesel, effective tax rate, excise duty, petrol, tax burden, tax reform, value-added tax
JEL classification
C10, H29, H31, K34, Q41References
1. Hammar H., Lofgren A., Sterner T. Political Economy Obstacles to Fuel Taxation. Energy Journal. 2014;25(3):1–17. https://doi.org/10.5547/ISSN0195-6574-EJ-VOL25-NO3-1
2. Damania R., Fredriksson P.G. On the Formation of Industry Lobby Groups. Journal of Economics Behaviour & Organization. 2000;41(4):315–335. https://doi.org/10.1016/S0167-2681(99)00079-7
3. Aklilu A.Z. Gasoline and Diesel Demand in the EU: Implications for the 2030 Emission Goal. Renewable & Sustainable Energy Reviews. 2020;118:109530. https://doi.org/10.1016/j.rser.2019.109530
4. Ghoddusi H., Morovati M., Rafizadeh N. Dynamics of Fuel Demand Elasticity: Evidence from Iranian Subsidy Reforms. Energy Economics. 2022;110:106009. https://doi.org/10.1016/j.eneco.2022.106009
5. Akkaya S., Hepsag A. Does Fuel Tax Decrease Carbon Dioxide Emissions in Turkey? Evidence from an Asymmetric Nonlinear Cointegration Test and Error Correction Model. Environmental Science and Polution Research. 2021;28(26):35094–35101. https://doi.org/10.1007/s11356-021-12907-9
6. Harju J., Kosonen T., Laukkanen M., Palanne K. The Heterogeneous Incidence of Fuel Carbon Taxes: Evidence from Station-level Data. Journal of Environmental Economics and Management. 2022;112:102607. https://doi.org/10.1016/j.jeem.2021.102607
7. Coglianese J., Davis L.W., Kilian L., Stock J.H. Anticipation, Tax Avoidance, and the Price Elasticity of Gasoline Demand. Journal of Applied Econometrics. 2017;32(1):1–15. https://doi.org/10.1002/jae.2500
8. Porcher S., Porcher T. Fuel Taxes and Consumer Behaviour: a Markov-switching Approach. International Journal of Global Energy Issues. 2018;41(1):14–24. https://doi.org/10.1504/IJGEI.2018.10013431
9. Boroumand R.H., Goutte S., Porcher S., Porcher T. Asymmetric Evidence of Gasoline Price Responses in France: A Markov-switching approach. Economic Modelling. 2016;52(B):467–476. https://doi.org/10.1016/j.econmod.2015.09.027
10. Parry I., Norregaard J., Heine D. Environmental Tax Reform: Principles from Theory and Practice. Annual Review of Resource Economics. 2012;4:101–125. https://doi.org/10.1146/annurev-resource-110811-114509
11. Stinson S., Barnes B., Buchheit S., Morrow M. Do Consumer-Directed Tax Credits Effectively Increase Demand? Experimental Evidence of Conditional Success. Journal of the American Taxation Association. 2019;40(2):1–19. https://doi.org/10.2308/atax-51960
12. David P. Basic Economic Gap Related to Smoking: Reconciling Tobacco Tax Receipts and Economic Costs of Smoking-attributable Diseases. Tobacco Control. 2019;28(5):558–561. https://doi.org/10.1136/tobaccocontrol-2018-054307
13. Kamruzzaman M.H., Mizunoya T. Quantitative Analysis of Optimum Corrective Fuel Tax for Road Vehicles in Bangladesh: Achieving the Greenhouse Gas Reduction Goal. Asia-pacific Journal of Regional Science. 2021;5(1):91–124. https://doi.org/10.1007/s41685-020-00173-5
14. Xiao J., Ju H. Market Equilibrium and the Environmental Effects of Tax Adjustments in China’s Automobile Industry. Review of Economics and Statistics. 2014;96(2):306–317. https://doi.org/10.1162/REST_a_00444
15. Tanishita M., Kashima S., Hayes W. Impact Analysis of Car-related Taxes on Fuel Consumption in Japan. Journal of Transport Economics and Policy. 2003;37(2):133–155. Available at: https://www.jstor.org/stable/20053929
16. Kantarci H. The Comparison of Fuel Taxes between Turkey, EU and OECD. Sosyoekonomi. 2018;26(35):229–247. https://doi.org/10.17233/sosyoekonomi.316162
17. Fang G., Chen G., Yang K., Yin W., Tian L. Can Green Tax Policy Promote China’s Energy Transformation?– A Nonlinear Analysis from Production and Consumption Perspectives. Energy. 2023;269:126818. https://doi.org/10.1016/j.energy.2023.126818
18. Fukui H., Miyoshi C. The Impact of Aviation Fuel Tax on Fuel Consumption and Carbon Emissions: The Case of the US Airline Industry. Transport Research part D: Transport and Environment. 2017;50:234–253. https://doi.org/10.1016/j.trd.2016.10.015
19. Gordeev D., Galeeva E. Increase in Excise Tax Rates on Gasoline and Diesel Fuels– a Negative Effect on the Budget and the Economy. Ekonomicheskaya Politika. 2022;1:126–153. https://doi.org/10.18288/1994-5124-2022-1-126-153
20. Bjertnaes G. Efficient Combination of Taxes on Fuel and Vehicles. Energy Journal. 2019;40(1):387–408. https://doi.org/10.5547/01956574.40.SI1.gbje
21. Shao H., Ye B., Pan H. Energy Conservation and Emission Reduction Effects of Fuel Tax and Assessment of Economic Impacts-based on the Beijing 3E-CGE Model. Letters in Spatial and Resource Sciences. 2022;15(3):377–399. https://doi.org/10.1007/s12076-021-00294-1
22. Carvalho N., Guillen J. Economic Impact of Eliminating the Fuel Tax Exemption in the EU Fishing Fleet. Sustainability. 2021;13(5):2719. https://doi.org/10.3390/su13052719
23. Hájek M., Zimmermannová J., Helman K. Environmental Efficiency of Economic Instruments in Transport in EU Countries. Transportation Research Part D: Transport and Environment. 2021;100:103054. https://doi.org/10.1016/j.trd.2021.103054
24. Janoušková J., Sobotovičová Š. Fiscal Autonomy of Municipalities in the Context of Land Taxation in the Czech Republic. Land Use Policy. 2019;82:30–36. https://doi.org/10.1016/j.landusepol.2018.11.048
25. Andrejovska A., Glova J. Corporate Tax Rates in the Context of Macroeconomic Indicators in the EU Member Countries. Ad-Alta– Journal of Interdisciplinary Research. 2022;12(1):23–31. Available at: http://www.magnanimitas.cz/ADALTA/1201/papers/A_andrejovska.pdf
26. Thottoli M., Mamari N. Determinants of Value Added Tax in Oman. Journal of Tax Reform. 2022;2(8):157–159. https://doi.org/10.15826/jtr.2022.8.2.114
27. Glavaski O., Pucar E., Beljic M., Stojkov S. Coordination vs. Competitiveness of Effective Average Tax Rates in Relation to FDI: The Case of Emerging EU Economies. Sustainability. 2023;15(1):227. https://doi.org/10.3390/su15010227
28. Uemura T. Evaluating Japan’s Corporate Income Tax Reform Using Firm-specific Effective Tax Rates. Japan and the World Economy. 2022;61:101115. https://doi.org/10.1016/j.japwor.2022.101115
29. Ueng K.G., Huang C.-C., Hu J.-L. Specific Versus Ad Valorem Taxation with Tax Evasion in Imperfectly Competitive Markets. Hitotsubashi Journal of Economics. 2017;58(2):107–119.
https://doi.org/10.15057/28954
30. Krzikallová K., Tošenovský F. Is the Value Added Tax System Sustainable? The Case of the Czech and Slovak Republics. Sustainability. 2020;12(12):4925. https://doi.org/10.3390/su12124925
31. Zheng Z., Li Y., Wu J., Wang Y. Sequential Scaled Sparse Factor Regression. Journal of Business & Economics Statistics. 2020;40(2):595–604. https://doi.org/10.1080/07350015.2020.1844212
32. He Y., Xu X., Cai Y., Cheng M. An Evaluation of the Effectiveness of Three Early-Warning Models on Financial Indexes. Applied Economics Letters. 2022;29(20):1880–1884. https://doi.org/10.1080/13504851.2021.1965079
33. El-Horbaty Y.S. A Note on Covariance Decomposition in Linear Models with Nested-error Structure: New and Alternative Derivations of the F-test. Journal of Statistical Theory and Practice. 2022;16:69. https://doi.org/10.1007/s42519-022-00291-7
34. Turner P. Critical Values for the Durbin-Watson Test in Large Samples. Applied Economics Letters. 2019;27(18):1495–1499. https://doi.org/10.1080/13504851.2019.1691711
35. O’Gorman T.W. A Generalized Normal Scores Test that Increases the Power of a Test of Significance for a Coefficient in a Linear Model. Communication in Statistics-Theory and Methods. 2021. https://doi.org/10.1080/03610926.2021.1987471
36. Pinelis I. An Asymptotically Optimal Transform of Pearson’s Correlation Statistic. Mathematical Methods of Statistics. 2020;28(4):307–318. https://doi.org/10.3103/S1066530719040057
37. Slavík M. Demand for Fuel and its Consequences for Indirect Taxation: A Microeconomic View. Finance a uver. 2004;54(5-6):202–233. Available at: https://journal.fsv.cuni.cz/storage/972_s_202_233.pdf
38. Hasanov M. The Demand for Transport Fuels in Turkey. Energy Economics. 2015;51:125–134. https://doi.org/10.1016/j.eneco.2015.05.023
39. Tang S.X., Sjoquist D.L. Differential Effects of Federal and State Gasoline Taxes on Gasoline Consumption. Hacienda Publica Espanola-Review of Public Economics. 2019;229(2):11–32. https://doi.org/10.7866/hpe-rpe.19.2.1
40. Miceikiene A., Ciuleviciene V. The Effectiveness Assessment of Excise Duties in View of State Goals. Transformation in Business & Economics. 2017;16(2):188–203. Available at: http://www.transformations.knf.vu.lt/41/article/thee
41. Proque A.L., Baterelli A.A., Perobelli F.S. Fuel Tax, Cross Subsidy and Transport: Assessing the Effects on Income and Consumption Distribution in Brazil. Research in Transportation Economics. 2022,95:101204. https://doi.org/10.1016/j.retrec.2022.101204
42. Pedrosa G., Leontyeva Y., Mayburov I. Promoting Zero Emissions Buses Programs: A Study of Ekaterinburg Residents’ Willingness to Pay. International Journal of Energy Production and Management. 2018;3(4):253–265. https://doi.org/10.2495/EQ-V3-N4-253-265
43. Leontyeva Y., Mayburov I. Theoretical Framework for Building Optimal Transport Taxation System. Journal of Tax Reform. 2016;2(3):193–207. https://doi.org/10.15826/jtr.2016.2.3.024
44. Hirte G., Tscharaktschiew S. Optimal Fuel Taxes and Heterogeneity of Cities. Review of Regional Research. 2015;35(2):173–209. https://doi.org/10.1007/s10037-014-0095-z
45. Söllner F. Road Traffic Taxation in Germany: The Present System, its Problems and a Proposal for Reform. Journal of Tax Reform. 2018;4(1):57–72. https://doi.org/10.15826/jtr.2018.4.1.045
Acknowledgements
This paper is an output of the science project SGS SP2023/013.
About Authors
Michal Krajňák– doc., Ing., Ph.D., MBA, LL.M.– Business Economy and Management, Associate Professor, Department of Accounting and Taxes, Faculty of Economics, VŠB-Technical University of Ostrava (Sokolská třída 33, 702 00) Czech Republic; Associate Professor, Department of Business Economy and Management, Moravian Colleague Olomouc (Třída Kosmonautů 1, 709 00) Czech Republic; ORCID: https://orcid.org/0000-0003-4924-3583; email: michal.krajnak@vsb.cz.
For citation
Krajňák M. Fuels Taxation in the Context of Tax Reforms in the Czech Republic. Journal of Tax Reform. 2023;9(1):34–46. https://doi.org/10.15826/jtr.2023.9.1.127
Article info
Received February 19, 2023; Revised March 11, 2023; Accepted March 20, 2023
DOI: https://doi.org/10.15826/jtr.2023.9.1.127
Download full text article:
~481 KB, *.pdf
(Uploaded
17.04.2023)
Created / Updated: 31 August 2015 / 3 July 2017
© Federal State Autonomous Educational Institution of Higher Education «Ural Federal University named after the first President of Russia B.N.Yeltsin»
Remarks?
select the text and press:
Ctrl + Enter
Portal design: Artsofte
ISSN 2414-9497 (online)