May 23, 2018 – the symbolic Tax Freedom Day, marking the day when an average taxpayer has paid all the dues to the government and begins to work for himself, falls in Lithuania. This year the Tax Freedom Day comes on the same day as in the last year, according to the Lithuanian Free Market Institute (LFMI).
“Regrettably, budget expenditure is growing at approximately the same rate as the economy. People earn more money and pay more in taxes. The same tariffs apply and the overall tax burden does not change”, – says Žilvinas Šilėnas, President of LFMI.
Every worker who earns the average salary (693 euros after tax) and spends it will pay 7,281 euros in taxes while those earning 1,000 euros after tax will pay over 11,120 in 2018, meaning that just to pay taxes they will have to work until July 11 and July 16, respectively.
“Not many give a thought to the fact that the tax amount paid by workers earning the average salary exceeds their combined spending on food, clothing and housing. However, pensions, health care, education and other social security-related expenses constitute a major portion of their spending”, adds Žilvinas Šilėnas.
This year Lithuanian taxpayers will pay over 13 billion euros in taxes, the lion’s share of 91 percent of which will be collected from six sources: social security contributions, VAT, personal income tax, excise duties, health care contributions, and corporate income tax, and merely 9 percent of tax revenue will come from all other taxes and duties.