Petr David

Possibilities of measuring tax evasion related to fuel sale

Abstract The article deals with the possibilities of estimating the amount of tax evasion concerning value added tax in the fuel market in the Czech Republic. Part of the text is the evaluation of the existing standard methods used for measuring tax evasion. It has been proved that these methods are not suitable for determining the amount of fuel tax evasion under given conditions. The authors propose a specific original method of quantification of tax evasion on the basis of data concerning distributor prices, gathered during the year 2012, and information obtained from the survey of interested entities.

Taxing Car-produced Carbon Dioxide Emissions: Matching the Cure to the Disease☆

Abstract The amount of carbon dioxide (CO2) emissions produced by cars is a linear (albeit fuel specific) function of the amount of fuel consumed. Because CO2 emissions generate social costs, through their effect on climate change, which escape the price mechanism, a tax on CO2 is indicated. An ideal tax would alter the consumer prices so that they match the marginal social costs. This setting thus calls for a specific tax on fuel equal to the value of externality resulting from the combustion of a unit of fuel. Since such tax scheme is readily available, we study to what extent the existing CO2 tax policies make use of it. We find that they do only to a limited extent. Thus our policy prescription is to drop existing CO2 taxes and use the existing fuel taxes to adjust fuel prices so that they match the marginal social costs related to burning of fuel.