Fiscal Burden of Self-Employed Persons in the Context of Tax Reforms and other Legislative Changes in the Czech Republic

Michal Krajňák and Kateřina Krzikallová

Journal of Tax Reform, 2025, vol. 11, issue 2, 381-396

Abstract: The article deals with the development of the tax and levy burden of self-employed persons in the Czech Republic from 1993 to the present. Payments for income tax and social security contributions are significant costs for entrepreneurs and have an impact on the business environment. The aim of this article is to evaluate the development of the tax and levy burden of self-employed persons in the Czech Republic using regression and correlation analysis methods. While tax reforms are relatively frequent in the area of personal income tax, and it can be concluded that the tax burden is not constant, changes in the legislative regulation of social security contribution are only minimal. However, as the results of the analysis show, social security contributions have increased significantly. The reason for this is the existence of minimum assessment bases. These minimum assessment bases are based on the average wage, and social security contributions also increase as the average wage increases. If the taxpayer’s tax base is less than or equal to the minimum assessment base, there is almost a minimal dependence between income tax and levy payments. The reason for this is that the tax burden is often zero due to the low tax base and a non-taxable minimum. If the tax base is higher, both the tax and levy burden increased but the levy burden increased significantly. However, a decrease in these payments cannot be expected due to the growing pressure on the balance of public finances. Future reforms will probably lead to an increase in both the tax and levy burden of self-employed persons.

Keywords: Czech Republic; personal income tax; tax reform; minimum assessment base; tax rate; self-employed persons; social security contribution (search for similar items in EconPapers)
JEL-codes: C02 E62 H24 K34 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:aiy:jnljtr:v:11:y:2025:i:2:p:381-396

DOI: 10.15826/jtr.2025.11.2.207

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