Implementation of New Tax Relief for Individuals During the Multi-Crisis in the Czech Republic

Abstract

The article examines the interrelation between tax reliefs and social benefits in the Czech Republic as complementary instruments of fiscal and social policy. Against the background of long-term state budget deficits intensified by recent crises, the study addresses the question of whether the coexistence of these two systems fulfils the principles of fair and efficient taxation and non-discrimination. The authors hypothesize that the dual system of tax reliefs and social benefits satisfies the requirement of fairness in taxation. The research applies an analytical and comparative legal-economic methodology, combining a normative assessment of tax and social policy instruments with synthesis of their fiscal and distributive impacts. The analysis reveals significant overlap between the two systems in purpose and effect, yet also systemic inconsistencies leading to unequal treatment of different income groups. Tax reliefs tend to favour higher-income taxpayers, whereas social benefits primarily target low-income households, producing regressive outcomes when assessed in isolation. The results indicate that fairness and efficiency can only be ensured through integrated evaluation of both instruments, rather than their separate assessment within public budgets. The hypothesis has not been confirmed, though neither has it been conclusively disproved due to the absence of comprehensive data on the combined economic impact. The article concludes that any reform of the Czech fiscal system must consider the simultaneous effects of tax and benefit mechanisms to uphold constitutional principles of equality and fiscal responsibility.