This article deals with economic autonomy of municipalities in the Czech Republic It analyses how the principles mentioned in the European Charter of Local Self-Government are met in the Czech legal system. The article brings the definition of local tax as an essential source of local self-government revenues and analyses possibilities of municipalities to influence local taxes. The article is relatively critical, because municipalities in the Czech Republic do not have enough revenue from local taxes. So due to their dependence on the state budget it is not possible to talk about real economic autonomy of the municipalities. The method to improve existing status is to give to the municipalities more power to decide on local taxes. The example of this solution can be found for example in Slovakia.