Czech Republic lacks tax incentives to fulfill climate protection goals, says Supreme Audit Office

Prague, Dec 9 (CTK) – The Czech Republic does not have any efficient tax measures to help fulfil the goals in climate protection when it comes to the reduction of pollution in transport and households, the Supreme Audit Office (NKU) said today.

It checked the setting of the financial and tax measures that are within the remit of the finance, transport and environment ministries.

The state is unable to motivate people to use environment-friendly vehicles, to curb the consumption of energy and to start using more environment-friendly sources of energy, the NKU said.

As a result, it lags behind most EU countries. However, not only the criteria of tax measures can be applied on climate protection, it added.

“It has emerged from the results of the check that the offices do not fulfil their roles as they should. They have not prepared such tax measures that would significantly help climate protection,” the NKU said.

In most EU countries, financial measures for climate protection are actively implemented, but in the Czech Republic, the audited ministries are only examining them, when it comes to transport.

The ministries have failed to propose changes in the legislation in the spheres of taxes and fees that would help ecologisation of transport.

The Transport Ministry took issue with the check, arguing that it has long paid attention to the lowering of pollution. It mentioned the exemption from the motorway fee for the vehicles using alternative fuels as of January 1, 2020, the measurement of vehicles by means of mobile expert units and the prepared introduction of environmental components of the toll for lorries.

Transport Ministry spokesman Frantisek Jemelka said in doing so the ministry was actively implementing the measures that are to protect the climate.

“We disagree with the conclusion from the NKU press release that the Transport Ministry is not fulfilling its role in the sphere as it should because one cannot only apply the criteria of the tax measures on climate protection as one can infer from the NKU conclusions,” Jemelka said.

The NKU has found out that the tariffs of the taxes and fees associated with the use of cars which are to help ecologisation of transport have declined since their introduction and do not fulfil their role any longer.

In some of these tools, one cannot prove their efficiency, be it the change in the road tax or the lowering of the excise tax for alternative fuels.

Some financial instruments basically do not work, such as the recycling fee, which was introduced in 2009 and was to prevent the import of obsolete vehicles to the Czech Republic, the NKU said.

Due to its setting, its effect was only negligible between 2015 and 2018, it added.

The report also warns that the Czech Republic has failed to use the opportunity giving to it by the EU regulation under which it can impose a tax on noise and air pollution from freight transport by means of toll.

Between 2015 and 2018 alone, the Czech Republic could gain 3.8 billion crowns more with the toll, the NKU said.

“The system results in the car fleet becoming obsolete, the import of old cars growing and the pollution not falling, while the proportion of environment-friendly cars is only increasing slowly and is low,” the NKU said.

The tax measures that are to make households adopt environment-friendly sources of heating have only had a limited impact. For consumers, it is still more beneficial to use coal, it added.

“However, one has to say that in tax support for environment-friendly sources of heating, the Czech Republic does not basically differ from other EU countries and the Finance Ministry is examining further taxation of pollution from home heating,” the NKU said.