European Green Deal: Environmental Taxation and Its Sustainability in Conditions of High Levels of Corruption

Despite environmental taxation’s presumed advantages for long-term sustainable development goals, the problematic institutional conditions associated with high levels of corruption could become a significant obstacle undermining these efforts. Taking example Czech Republic as benchmark, aim this article is to evaluate impact and its implications on size official shadow economy in sector burdened excise tax while confronting it not such tax. In terms methodology, an extended DSGE (Dynamic stochastic general equilibrium) model has been used. case economy, two sectors, taxes, followed similar trend. However, concerning research found out that if taxation applied, then lower, non-systemic positive effect production increased workforce motivation clearly dominates, suppressing reduced capital accumulation. Conversely, taxation, almost unequivocally negative economy. sense, capacity limit implementation policies including European Green Deal, especially systemic nature.