Here we go, the Tax Freedom Day 2024 is coming. The current weekend, in fact, will be the last weekend of the year in which Italians will be called to work for the tax authorities. From Monday 3 June
the so-called ‘tax liberation day’ is therefore triggered – 24 hours in advance: a deadline which for at least fifteen years, thanks to the annual processing carried out by the research office of the CGIA of Mestre, for many Italians is the achievement of an important goal, even if purely symbolic. Be they VAT numbers, employees, pensioners or businesses.
What is Tax Freedom Day
In purely theoretical terms, explains the CGIA of Mestre, from Monday we will work to satisfy our needs and no longer to pay the taxes, duties, duties and social contributions expected in 2024. A revenue that should guarantee 909.7 billion euros for the treasury. Resources that are indispensable for the State to operate schools, hospitals, buses, trains, public offices and to pay pensions, salaries of state workers and local authority employees. In other words, it is money that public administrations first collect, then invest in services, welfare, social and economic infrastructures to improve the quality of life of each of us.
In order not to be misunderstood, it is best to highlight it forcefully: although ‘the day of fiscal liberation’ does not constitute an absolute principle – explains the CGIA of Mestre -, this exercise empirically demonstrates how excessive the tax burden continues to weigh on Italians. Although this year the tax burden is destined to fall by 0.4 percentage points compared to 2023. And thanks to this contraction, Italians will be able to celebrate ‘tax freedom day’ on Monday 3 June; in short, if from the beginning of January until tomorrow we have hypothetically worked to honor the tax requests, from the beginning of next week until December 31stInstead, we will do it for ourselves and our families. From this school case developed by the CGIA Research Office, it emerges that for the current year, 154 days of work were needed (Saturdays and Sundays included) to fulfill all the tax payments expected this year (Irpef, Imu, VAT, Irap, Ires, various additional taxes, social security/insurance contributions, etc.). Compared to 2023, this year we “free ourselves” from taxes one day earlier, even if according to the calendar there are two, since 2024 is a leap year.
Tax Freedom Day on June 3rd, why?
But how did the CGIA Research Office establish that June 3rd is Tax Freedom Day in 2024? The estimate of the national GDP expected this year is 2,163 billion euros and has been divided by 366 days, thus obtaining an average daily figure of 5.9 billion euros. Below, the forecasts of revenue and social contributions that income recipients will pay to the State this year have been “recovered”, which will amount to 909.7 billion euros3. Therefore, this last amount was compared to the daily GDP, thus obtaining the fiscal liberation day of 2024 which starts 154 days after the beginning of the year, i.e. next 3 June. As we were saying, it is a purely theoretical exercise which, however, allows us to determine, with a non-“conventional” unit of measurement, the tax burden on taxpayers of any country.
No celebrations for 2.8 million ‘tax evaders’
If for those who pay taxes down to the last cent, ‘tax freedom day’ is a deadline ideally worth celebrating, for those who don’t pay them or only do so sporadically it is, obviously, a day like any other. In this last case we include, for example, the completely or partially irregular workers present in Italy which, according to an Istat estimate referring to 20214, amount to at least 2.8 million. They are people who are completely unknown to the tax authorities or who, although partially in compliance, fail to pay part of the taxes and social security contributions, thus violating the tax and contribution rules.
In absolute terms, the regions that have the most are the most populated ones: Lombardy with 439,500 irregular units, Lazio with 366,200 and Campania with 308,200 are the territorial areas where ‘black’ is most abundant. If, however, we refer to the rate of irregularities, the regions of the South are those most affected by this economic/social plague. Calabria, for example, has a share of 19.6 percent, Campania 16.5, Sicily 16 and Puglia 14.4. The Italian average stands at 11.3 percent.
2024, tax burden set to fall
According to what is reported in the Economic and Financial Document, the tax burden in 2024 is estimated at 42.1 percent of GDP, a decrease of 0.4 points compared to the threshold reached in 2023. This result is attributable to the fact that nominal GDP it is destined to grow (+3.7 percent) faster than the increase in tax revenue (+2.6 percent). Therefore, the tax burden is expected to decrease. It should be remembered, in fact, that the same is given by the ratio between tax revenue and nominal GDP.
The 2.6 percent increase in revenue compared to 2023 depends on a number of factors: the first is linked to economic growth (approximately +1 percent in 2024); the second to the growth of wages, thanks to contract renewals, the payment of arrears in the public sector and the increase in employment. More limited, however, is the impact on revenues attributable to the fiscal tightening planned for this year, such as the higher taxation on tobacco, the increase in VAT on some products for children, feminine hygiene and the reopening of terms for the revaluation and payment of the substitute tax on the revaluation of land and shareholdings. Finally, the measures that lightened the tax burden on Italians in 2024, such as the reduction of the Irpef, through the elimination of the second income bracket (less tax amounting to approximately 4.2 billion euros) also certainly influenced the final result ) and the “mothers bonus”, with exemption from contributions for female employees with two children.
Italians among the most harassed in the EU
Meanwhile, we continue to have one of the highest levels of tax pressure in the EU. In 2023, in fact, only France, Belgium, Denmark and Austria recorded a higher tax burden than ours. If in Paris the tax burden was 45.8 percent of GDP, in Brussels it stood at 45.3 percent, in Copenhagen at 44.5 percent and in Vienna at 42.9 percent. Here, however, it reached the threshold of 42.5 percent. Among the 27 EU members, Italy “placed” in 5th place. Germany, however, ranked 10th with a tax burden of 40.6 percent and Spain 13th with 37.8 percent. The average for European countries was 40.3 percent; 2.2 points less than the Italian average, concludes the CGIA.
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