Patria: Tax freedom day in ČR to be two days later, on June 21

Prague, Jan 9 (CTK) - Czechs will this year celebrate the tax freedom day on June 21, two days later than last year, according to calculations of Patria Finance.

The tax freedom day is a day from which people earn money only for themselves. Until that date, their entire wage goes to the state.

"A number of tax system parameters are changing this year. The biggest influence on public finances and wallets stems from the rise of both VAT rates by one percentage point. These tax changes will, of course, be reflected in the overall tax burden measured by a compound tax quota, or the tax freedom day," Patria Finance chief economist David Marek said.

The change of VAT rates, the introduction of a 7-percent tax surcharge on individual income exceeding the social insurance ceiling and other changes will raise the compound tax quota from 34.7 to 35 percent of GDP, Marek said.

According to calculations of the Liberal Institute, Czech had a tax freedom day on June 9 last year. The Institute uses the methodology of the Organisation for Economic Cooperation and Development (OECD), or more precisely, its estimates of the share of public finances on GDP.

According to Marek, this ratio should reach 34.6 percent this year and the tax freedom day would thus be June 9 again.

Patria Finance calculates the tax freedom day using the method of the Tax Foundation organisation which divides the year in two parts in proportion corresponding to the share of total tax revenues and the net national income.

Tax freedom day by Patria Finance calculations in 2003-2012:

year tax freedom day
2003 June 18
2004 June 20
2005 June 17
2006 June 16
2007 June 22
2008 June 9
2009 June 12
2010 June 15
2011 June 19
2012 June 19
2013 June 21

Source: Patria Finance