Today, June 20, is Tax Freedom Day: a day created to compare the tax burdens of countries. Cyprus is still faring well.
It is a holiday that will go unnoticed by many people: Tax Freedom Day. That is the date in 2022 when we no longer work for the state, but for ourselves. In short, this means that everything we have earned so far this year has gone to the government, but that every euro that rolls our way from now on is for ourselves.
To establish this tipping point, a country’s taxable income is divided by its Gross Domestic Product. This is then converted to a date in the calendar year.
The purpose of this calculation exercise is to compare the tax burden between countries. The later in the year Tax Freedom Day falls, the greater the share of our income that goes to taxes and social contributions.
Those are the worst countries, in terms of tax burden:
- Slovakia
- Sweden
- Hungary
- Germany
- Italy
- Belgium
- France
- Austria.
The French think tank Institut Économique Molinari and the Americans for Tax Reform Foundation have calculated which day in the year Tax Freedom Day falls for all Western countries. The tax burden is relatively high.
This shows that the tax burden in most EU countries is quite high. South Africans had already settled with the tax authorities on 7 March. Americans and Canadians were freed from the yoke of the tax authorities in April. Of the EU member states, only Cyprus and Malta (both known as tax havens) join.