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Tax Freedom Day falls on June 2 this year

It arrived earlier this year thanks to state holidays and the leap year.

(Source: Sme)

Tax freedom day, the first day in a given year on which people have earned enough to fund the state’s annual tax demands, falls on June 2 this year in Slovakia. This means that Slovaks satisfied their tax duties earlier this year than the last, when Tax Freedom Day fell on June 4, based on an analysis of the Association of Tax Payers and the F. A. Hayek Foundation.

Analysts have calculated that this year Slovaks work for the state 106 days, which is by one working day more than in 2015, while holidays and the leap year have helped to reach an earlier Tax Freedom Day this year.

“This year there was one more work day and simultaneously holidays fell on weekends which helped the government and optically improved the Tax Freedom Day by two work days,” said Matúš Pošvanc, director of the F. A. Hayek Foundation as cited by the SITA newswire.

Pošvanc also pointed out that the overall level of income redistribution increased moderately this year when the expected amount of the overall level of income redistribution in Slovakia increased from 41.8 percent of GDP to 42.12 percent. This means that from every euro created in Slovakia the state redistributes more than 42 cents.

In addition to the Day of Tax Freedom, the F. A. Hayek Foundation also calculated the tax and payroll burden of the average working person and wage costs. Given the average gross monthly wage is €912, wage costs of the employer are €1,233 while the employee receives net almost €700. After deducting excise and value added taxes, it remains a bit more than €591 in his or her wallet. This means that the average employee receives only about 48 cents from every euro an employer pays for their work. 

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