Fees or Taxes? The Question for the Czech Municipality

This paper is focused on the analysis of the basic patterns of the municipal revenue in the Czech Republic, especially the trade-off between the tax and fee financing. Data reveal that the Czech municipalities often introduced local coefficient of 2 which doubled the basic property tax revenue. This is the mean value applied for more than one half of the surveyed units. Local fee is often introduced at the level of 500 CZK per capita. It seems that the municipality rather prefers such values, which are used by the vast majority of municipalities. We can hypothesise it is due to a competitive effect, when citizens move from one municipality to another to reach lower taxes or fees, ceteris paribus. In this paper was also analysed the relationship between tax and non-tax revenues. Moreover, it seems there is not a trade-off between the tax and fee financing. It also seems that both larger and "richer" municipalities prefer lower level of fees. It is in accordance with the hypothesis that the revenue needs of the larger municipalities are sufficiently financed by the taxes or by other sources.