The calculation of fiscal freedom is composed of three factors:
Individual income tax burden,
Tax burden on business income as well
Total tax burden as a percentage of GDP.
In 2020, Fiscal Freedom Day for the Western Balkans is the 111th day of the year.
This year, fiscal freedom comes on the same day as it came in 2019. In 2020, in Kosovo, Albania and Northern Macedonia this day falls earlier, while in Bosnia-Herzegovina, Montenegro and Serbia it falls. Later. Even in 2019, this day has come respectively for the countries of the Western Balkans. The only change that has occurred between the two years is in Albania. In 2020 the day of fiscal freedom is two days earlier than in 2019, due to the reduction of fiscal burden in 2019.
Fiscal Freedom Day represents the taxpayers of a country in the face of their burden from the fiscal administration to collect fiscal liabilities for the budget. This day is the indicative date to be recognized, on what day of the year the burden on the state budget is met or to show taxpayers how many days they need to work in order to pay their share of tax liabilities on behalf of the budget. After this day, the remaining income remains as logic in the pocket of the business or individual, to pay individual, family or business expenses. From the calculation of the days consumed in each country to pay the fees that constitute the fiscal burden, according to the data declared by each of the fiscal revenue administration and confirmed by the Ministry of Finance for each of the Western Balkan countries, it results that depending on of the level of fiscal burden to GDP, the Day of Fiscal Freedom in 2020 in the Western Balkans comes on April 20, 2020.
Fiscal Freedom begins its journey through the region by knocking first on Kosovo on March 28. He then went to Albania on April 3 and a day later to Northern Macedonia on April 4. There is no date for this month to be celebrated as Fiscal Freedom Day. In May, Fiscal Freedom Day arrives in Bosnia and Herzegovina and five days later arrives in Serbia on May 9. Fiscal freedom has recently been celebrated in Montenegro on May 11.
This year, Kosovo is considered to have an advantage in easing the burden with Albania, reaching this day 5 days before and 22 days before WB6. After this date, the entire WB6 region begins to feel completely relieved of the fiscal burden owed to the budget. Based on the date when the Fiscal Freedom is celebrated, everyone understands how much the burden of the budget burdens the citizens of the country. On the other hand, Fiscal Freedom is the index that shows how many free days businesses and individuals have throughout the year to work for themselves and their families.
Why does Tax Freedom Day change every year?
To bring this day to the attention of all taxpayers as soon as possible, ALTAX presents the Fiscal Freedom Calendar every year for the last decade. The reason why the day changes is closely related to the revenues collected by the fiscal administration and the agencies that collect social contributions to the state budget. The more revenue collected during a year, the later the Fiscal Freedom Day is celebrated for the following year. Albania had this day later in 2019, as more revenues were collected than a year ago in relation to GDP. In other WB6 countries, this day has not changed in 2020, due to revenue collection in the same ratio with GDP as in 2019. This income may not necessarily be the same between years, but may be in the same proportion when they are viewed as the level achieved by GDP.