Tax Freedom Day in Lithuania Falls on May 5 in 2005

According to the Lithuanian Free Market Institute’s (LFMI) annual calculations, Tax Freedom Day in Lithuania has moved slightly earlier in the calendar and will fall on May 5 this year. In 2005 the average Lithuanian taxpayer has to work 125 days to pay the total tax bill imposed by all levels of government.
The Tax Freedom Day is a symbolic day in the year when the average income earner stops handing over all his income to the government and begins to make money for his own and his family’s welfare. It is an indicator of the tax burden in relative terms which shows what portion of the value created by the people is taken by the government to be distributed through the national budget and non-budget funds.
LFMI calculates the tax burden as the ratio of projected total tax revenues to net national product (NNP), based on the methodology used in other countries as well (USA, Canada, UK, etc.). The tax burden, calculated according to this methodology, does not encompass money expenditures and time costs incurred related to tax administration. Government borrowing is not included either, while in Lithuania it is constantly growing and may become a tax burden in the future.
This year Tax Freedom Day in Lithuania arrives three days earlier than in 2004 but it doesn’t mean that Lithuanians started to pay less in taxes. The total amount of taxes collected to finance the state function will be more significant this year as compared to 2004. The tax burden in relative terms (!), due to bigger NNP generated, will decrease from 35.1 percent in 2004 to 34.1 percent this year, whereas the tax burden in absolute terms will go up, amounting to 19,4 billion litas in 2005 as compared with 17,7 billion litas in 2004.
LFMI started the tradition of commemorating Tax Freedom Day in Lithuania in 1993. Since 1993, when the Lithuanian taxpayers turned to the government everything they earned until April 13, Tax Freedom Day has moved later in the calendar. Starting from 2001, Tax Freedom Day came earlier every year: on May 15 in 2001, on May 4 in 2002 and on May 3 in 2003.
Tax Freedom Day in Lithuania since 1993
Based on LFMI‘s annual Tax Freedom Day calculations
1993 April 13
1994 April 22
1995 April 27
1996 April 19
1997 May 1
1998 May 13
1999 May 16
2000 May 16
2001 May 15
2002 May 4
2003 May 3
2004 May 8
2005 May 5