OECD official warns Czechs on risks of introducing flat tax

An OECD official has warned the Czech Republic of the risks involved in pushing through a 15-percent flat tax, one of the fundamental reforms proposed by the election-winning right-of-centre Civic Democrats. The head of the OECD's country studies division, Andreas Woergoetter, said the introduction of a 15-percent flat tax could cause a serious revenue shortfall and a flat tax of such an extent would make it necessary to look for savings in other areas. If these savings were not found, he said, fiscal policy could be derailed. One of the Civic Democrats' key policies is a flat 15-percent level of income tax and VAT, renewed privatisations, shrinking the state sector and combating corruption.