Slovakia has abolished its flat tax rate, but other Eastern and Central European countries are likely to continue with the policy.

Slovakia has maintained a flat tax rate for nearly nine years. Originally introduced with the aim of stimulating investment and to show the world it had moved on from its former communist economy, it has now been abolished by the country’s newly re-elected government. Andreas Peichl analyses the effects of the flat tax since 2004, and what the results of the government’s move to a more progressive tax system might be. He also concludes that, despite the lack of data on its effectiveness, the remaining countries in Europe that still use a flat tax are unlikely to abolish it.