Taxes have a big impact on funding in our society, including education, health, military, infrastructure and social security. The uses the money that is collected to develop a country which would ultimately benefit its citizens. The more taxes a country can collect, the more progressive it will be. Let's delve a little deeper into the countries that have the highest taxes in the world.
Countries with the Highest Taxes in the World
Belgium is ranked among those countries with the highest taxes in the world and is also ranked as one of the most developed countries in the world. It has a strongly globalized economy with its transport infrastructure integrated with the west of Europe. The country adopts a progressive tax system, wherein the higher-income earning individuals have a higher tax rate than lower-income individuals. Its top progressive rate is a whopping 50% and average tax rate reaching 40.7%. Their government allows deductions for business expenses, social contributions and 80% of alimony payments, and they have a personal allowance based on their filling status which helps lower taxes paid.
Germany is the most populated country in Europe and is also the country with the second highest taxes in the world. Germany collects an average annual tax of 39.7%. Tax revenue in Germany is divided and shared among its 3 levels of government - the federal government, the individual states, and finally the local government.
Denmark, a small country located in Northern Europe comes in at third place. The citizens of Denmark are taxed an average of 36.25% on their income. It is said that the Danes are among the happiest people in the world, due to Denmark's budget allocation to its social services which is considered among the best in the world.
Hungary, a country with a population of just around 10 million people, is the country with the fourth highest taxes in the world. Income tax is collected by the local governments and the federal governments. The average tax collection of the country is 33.5%. Believe it or not, the income tax collected in Hungary already contributes about 33% to its Gross Domestic Product. Of course, there are also tax breaks are available in Hungary.
Slovenia is a beautiful and peaceful country located in southeastern Europe. In 2006, Slovenia passed a motion that simplified the system of taxes collected in the country. Despite this, Slovenia still ranks as the fifth country with the highest taxes in the world. It has an average tax rate of 33.4%. It is only narrowly beaten by Hungary.