Czech Tax Freedom Day 2022

Quinten Massys: Tax Collectors // Public domain

Czechs have to hold out for one more month. After June 17, 2022, they will start earning for themselves. Until then, for 167 days, they work only for the state. That makes this year one of the least free since the Liberal Institute has been counting Tax Freedom Day since 2000.

Tax Freedom Day represents a notional boundary that divides the calendar year into two periods – the part of the year leading up to Tax Freedom Day must be earned to cover government and public spending. This virtual period of 100% taxation ends on Tax Freedom Day, from which we earn for ourselves and make discretionary decisions about the money we earn. For every CZK 20,000 we keep for our own consumption, the state redistributes an additional CZK 16,894.

In the two years of the coronavirus pandemic, the Czech Republic has experienced two of the least fiscally free years, and unfortunately we have moved into a ‘new normal’, when it seems that deficits of hundreds of billions of euros will be quite common. The new government has inherited the fiscal situation, so it cannot be criticised for the late Tax Freedom Day this year, we will see how it deals with it in the years to come,” comments Martin Pánek, director of the Liberal Institute.

“The date of Tax Freedom Day in our methodology is also negatively affected by the war in Ukraine,” he adds.

The Liberal Institute uses a methodology focused on the expenditure side of public finances to calculate Tax Freedom Day. It is the expenditure that must be financed by tax revenues and that, in the case of deficit budgets, also determines the need to repay debt in the future.

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Liberalni Institute