The tax burden directly determines how many resources remain in the hands of businesses and how much goes to the state budget. However, it also has some influence on the price level. The size of the tax burden affects the speed of economic development – the more money a business has in possession, the more development and expansion opportunities it has, the more materials it buys, the more money it invests in the purchase of new equipment.
The tax ceiling is not designed to strengthen the debt ceiling, as the latter has been devised so that the irresponsible governments in the future could not impose bring an unprecedented burden on the public finances.
The next five years will be crucial. Public finances should come out of huge deficits, and the lesson from the previous crisis is clear. Tax increases will never be temporary. Pulling the tax brake can serve as an additional “austerity” argument in the discussion on lowering the deficit.
The ruling politicians are unfortunately going in the opposite direction. While a person working for a minimum wage in 2015 paid 29% in taxes and levies, with the planned minimum wage, they will pay more than 40% next year.
Paying the advanced tax in Slovakia is a bureaucratic burden, since an entrepreneur has to take care of the regular payments. But there is a bigger problem. An entrepreneur has to pay the advanced tax from her/his current income – but the payment size is set according to her/his last year’s tax.
In October 2016, IME together with FNF launched “My taxes” – a specialized online personal tax calculator, which can be accessed at the kolkodavam.bg website. The name “kolkodavam.bg” translates to “How much do I give?”. We are happy to announce that the website is already available in English.
Lithuania’s level of economic freedom has been steadily improving. The country has jumped up by two positions and ranked 13th in the world in the 2015 edition of the Index of Economic Freedom. The index is compiled by the Heritage Foundation in partnership with The Wall Street Journal.
Compared to the previous year, tax burden was on the rise – the average European employee pays more than 45% of income in taxes.
