This year's Tax Freedom Day in Croatia falls on June 29, two days earlier than in 2018, shows a calculation made by the Lipa taxpayers' association, which has welcomed the tax pressure decrease.

The calculation refers to a hypothetical citizen who earns the average wage, is married, has one child, lives in Zagreb, owns a car, does not smoke and pays a TV subscription, Lipa said in a statement on Friday.

Tax Freedom Day is the day of the year until which citizens work for the state and for everything that is paid for from the state budget and when they start working for themselves and their family.

In most European countries, that day comes much sooner than in Croatia, the association says, but also welcomes the decrease in tax pressure compared to the last two years.

At the same time, Lipa is concerned that the burden on the business sector in the form of taxes and contributions continues to be higher by 2.5 percentage points or almost HRK 11 billion compared to the pre-crisis period.

“The decrease in the number of days the average worker has to work for the state shows that previous tax cuts have yielded an effect and that the government should continue reducing the tax burden as well as start implementing reforms that will step up economic growth. Lipa supports further tax breaks, notably cuts in direct taxes, as well as reducing the burden on the budget, without which structural reforms will not be possible to implement,” the association says, opposing new requests for an increase in public sector wages if real reforms are not conducted first.

A more dynamic labour market and lack of workers in the private sector provide an ideal opportunity to downsize the public sector, which in the long run is the only way for taxpayers who fill the state budget to celebrate Tax Freedom Day earlier than in recent years, the association says.