In which European countries do people pay higher taxes?/ How does Albania rank?

2024-02-06 22:10:00, Ekonomi CNA

In which European countries do people pay higher taxes?/ How does Albania rank?

Average wage earners in Europe paid about a third of their wages in taxes in 2022, according to the International Tax Institute.

The tax burden across Europe varies significantly, with workers in Western Europe and more developed countries paying much more.

Denmark (55.9%), Austria (55%), Portugal (53%), Sweden (52.3%) and Belgium (50%) are some of the countries with the highest personal income tax rates.

On the other hand, Romania (10%), Bulgaria (10%), Bosnia and Herzegovina (10%), Kosovo (10%) and North Macedonia (10%) are the European countries with the lowest taxes. In Albania, this rate is 23%.

For Eastern and Southeastern European countries like Romania, Bulgaria and Bosnia and Herzegovina, which are still developing their infrastructure and economies, lower taxes are a way to attract foreign investment and hopefully keep it.

These countries often offer cheaper labor and production costs, tax breaks and a wealth of untapped markets and opportunities. Not only that, but they can also often offer a better standard of living, as the cost of living is significantly cheaper than most Western European countries.

In which European countries do people pay higher taxes?/ How does Albania rank?

Southern and Eastern Europe also have some of the fastest growing economies, with Bulgaria, North Macedonia, Romania and Cyprus all seen as future growth hotspots for some companies and industries.

However, in recent months, countries such as Romania have tried to raise taxes on workers in the IT sector. The government is also trying to remove exemptions from health insurance payments for workers in the construction, food and agriculture sectors in order to increase tax revenues.

Do higher wages offset the higher tax burden?

In some cases, average wages in higher-tax countries such as Denmark and Austria are also higher, which has gone a long way in alleviating some of the financial pressure.

According to Eurostat, the average salary in Denmark in 2022 was around 62,972.33 euros, while in Austria, 68,690.65 euros.

This was due to more open salary negotiations, for example, due to Denmark's flexible working model, as well as a greater emphasis on education and career-long learning. Some countries also experience more demand in high-paying sectors such as finance, banking, law and medicine.

Can advancing inflation complicate the tax burden?

Inflation is also another factor that can make tax burdens potentially heavy. This is especially true after the Russia-Ukraine war that has seen energy and food prices rise over the past few years. The Israel-Hamas war also had a further impact.

If this trend continues, rising consumer prices will put more and more pressure on people's wallets, making high taxes feel even more burdensome./ Euronews

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