Environmental Tax Reform

The primary objective of the environmental tax reform (ETR) is to stimulate economic subjects to such behaviour that leads to a reduction in environmental damage and its impacts on the public health.

The taxation concerns goods and services the production and consumption of which leads to a demonstrable negative impact on the environment and human health.

The ETR should not result in an increase in the total tax burden. Additional revenues from the taxation introduced under the ETR should be accompanied by an adequate decrease in other taxes or increased state budget expenditures.

The Government acknowledged the Environmental Tax Reform Principles and Schedule on 3 January 2007, which launched the implementation of the ETR in the Czech Republic. The ETR is scheduled to take place in three stages until 2017.

The first stage of the ETR consists in a transposition of Directive 2003/96/EC on the taxation of energy products and electricity. Three new taxes were thus introduced in 2007: the taxes on natural gas, solid fuels and electricity, supplementing the existing excise duty on mineral oils. The taxes became part of Act no. 261/2007 Coll., on stabilisation of public budgets, and became effective on 1 January 2008.

The second stage of the ETR is currently under preparation: its goal is to reduce emissions to air.