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January 17, 2025 | 01:29 pm
TEMPO.CO, Jakarta - One of the most well-known proverbial sayings is “The only sure things in life are death and taxes.” This saying has stood the test of time, dating back to ancient civilizations, where taxation systems were already in place.
Taxations have long served as the source of country revenue, helping to fund essential public services like healthcare, education, and infrastructure. However, there’s a noticeable contrast across the globe—some countries have relatively low tax rates, while others impose hefty ones.
Some countries with the highest taxes record a whopping number exceeding 50%. While this big number can sometimes feel like a heavy burden, understanding the diverse tax rates and regulations around the world can offer valuable insights.
List of Countries with Highest Taxes
Nomad Capitalist reveals Ivory Coast as one of the countries with the highest tax rates. Other nations that fall into this category include:
1. Ivory Coast
Ivory Coast is now the country with the highest tax rates, reaching its progressive income tax up to 60%. The nation's tax policies aim to fund development projects, but a significant rise in its people's quality remains a questionable subject.
However, in terms of economic growth, this West African country has shown a strong performance, driven by its role as the world’s leading cocoa exporter.
2. Finland
Finland is known for its strong social welfare programs, and the high taxes citizens pay to fund these initiatives. Upon the small country of 5.5 million people, Finland applies an income rate that can rise to 44%.
Beyond that, the country also includes additional taxes, such as local municipal taxes of up to 10.8% and a church tax of up to 2.25%, further marking its reputation as the European country with the highest taxes.
3. Japan
As one of the most developed nations in the world, Japan is also among the countries with the highest taxes. The marginal tax can reach up to 45%, meaning Japan received an impressive number due to its major contributions in the technology and automobile sectors globally.
4. Denmark
Denmark’s income tax can climb up to 55.9% for high earners, but in return, the Danes enjoy extensive access to social services. The Danes are far from disappointed with this burden, as reflected in the country’s reputation as among the happiest countries in the world.
5. Austria
In Austria, individuals earning over €1 million face top income tax rates of up to 55%. The responsibility doesn’t end there, Austrians are also required to pay an 18% social security rate, while bonus payments are taxed at 6%, and capital gains are subject to a 27.5% tax rate.
6. Sweden
According to Sweden.se, this European nation has seen steady economic growth in 1970. With its low-income inequality and high quality of life, Sweden is an attractive place to live—though residents do pay a hefty 52.3% personal income tax in return for access to extensive social benefits.
7. Belgium
Belgium consistently ranks among the countries with the highest taxes in both Europe and the world. The country has a progressive income tax system with rates that can reach as high as 50% for anyone earning over €48,320.
Nevertheless, according to the OECD Better Life Index, Belgians enjoy high-quality public services, including education, housing, health, life satisfaction, and civic engagement.
8. Israel
Though small, Israel, a Mediterranean country, has an impressive marginal tax rate of 50%. Regardless of the steep taxes, the country’s 9.7 million population remains striving to drive innovations and technological advancements.
While some countries with high tax rates, like Denmark and Sweden, use their systems to fund comprehensive social programs, others, such as Indonesia, face challenges with tax regulation. The World Bank recently labeled Indonesia’s tax system as the worst, prompting a response from the government official, Luhut Pandjaitan. Learn more about it, here.
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