Property Tax Autonomy of Municipalities in the Czech Republic and Slovakia

The objectives of the paper are to compare the development of the legally granted municipal autonomy regarding the property tax in the Czech Republic and Slovakia since 1993 and its real implementation in 2011 and to evaluate the impacts of the municipal autonomy regulation on municipal behaviour. The comparison is based on a legal analysis of the versions of the law on property tax pertaining in the individual years 1993-2012 in both the countries and a comparison of the tax rates actually implemented in 2011 in the Czech and Slovak district towns. Czech municipalities can influence the tax rates through three types of coefficients which enforce quite an uniform approach to the entire territory of the municipality as well as different types of property. In contrast, the autonomy of Slovak municipalities has increased gradually and, since the introduction of the new law in 2005, it has seen only minimal limitations. The average tax rates are higher in Slovakia with the exception of residential houses and apartments. The highest differences appear in the case of property used for industry and other entrepreneurial activities. The results obtained suggest that in both the systems municipalities attempt to shift the tax burden from the residents to other entities and that the link between the property tax and the local service benefits is weakened.