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Social security contributions dominate in the Czech tax structure, at the expense of the personal income taxation. An optimum role of the social security contributions is the financing of the social insurance only; these “contributions” should not substitute personal income tax. The main aim of this article is the evaluation of the EU “first-generation” value-added tax and its potential reforms. An up-date of the EU and Czech VAT is possible and very efficient. A major reform would replace it with a wage tax and a business tax, following e.g. the Hall & Rabushka proposal. A small, Czech VAT reform would introduce the missing financial sector taxation and mean a partial transition to the NZ “second-generation” value-added tax (single-rate, 15%), in conformity with the EU VAT directive. The introduction of the (government-promised) single collection point might bring a partial optimization of the Czech tax structure, too.