Tax Freedom Day, the first day in a given year on which people have earned enough to fund the state’s annual tax demands, will be delayed for a record period of time in Slovakia this year.
While in 2019, Slovaks started to earn money for themselves as of May 27, this year, they will have to wait a few more weeks. The reasons are the increasing expenditure of the government in response to COVID-19, as well as unplanned expenditures imposed by the previous Smer government.
“The impact of the coronavirus pandemic will inevitably be reflected in this year’s Tax Freedom Day, which will certainly be significantly later than last year,” said Tomáš Púchly, analyst with the F. A. Hayek Foundation, as cited by the Hospodárske Noviny daily.Related articleRead more
The F. A. Hayek Foundation calculates the Tax Freedom day annually. In the neighbouring Czech Republic Tax Freedom Day will be on June 24, a record 27 days later than in 2019. Slovaks may expect a similar date. This means Slovaks would be earning for the state longer than at any other time in the history of the ranking, i.e. from 1999.
The price tag for the corona crisis includes benefits the state pays to parents for being home with their children as well as measures to keep companies afloat.
The analyst claims that Slovak public finances would have ended in an unflattering condition without the influence of the pandemic in any case.
“The previous government, prior to the February general election, passed some extremely burdensome measures at the very last moment,” said Púchly. “Especially the 13th month pensions, which have not been included in the budget and for which there is simply no money.”
The bank analysts expect that the Slovak economy will contract by 8.3 percent this year. This will be by 3 percentage points more than in 2009 when the financial crisis hit Slovakia. At that time the Tax Freedom Day arrived nine days late. This year it might be up to a month.Read more
4. Jun 2020 at 23:36 | Compiled by Spectator staff