Every country imposes taxes on the income of its citizens, production activities and services to run their economy. When the government collects tax, then it uses the same to provide basic facilities such as electricity, water, education, hospital and road etc. to its citizens so that the welfare of the people can be increased. But while imposing the tax; the concerned government also keep in the mind that tax rate should be moderate so that people don't get discourage for more earning.
In this article we have explained about 10 countries where tax rates are highest in the whole world. Let’s have a look…
1. Aruba Country
This small size country is located in the Caribbean island and under the Kingdom of the Netherlands. The size of this country’s economy is approximately $ 3 billion. Per Capita Income in this country is about $28,924 per year. The rate of income tax levied in this country is highest in the whole World i.e. 59%.The main source of income of its citizens is gold mines, petroleum and tourism.
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Sweden is a Scandinavian country based in Northern Europe. The size of its economy is $517 billion and Per Capita Income is $ 51,603 a year, which is placed at 11th place in the World. Sweden has the second highest income tax rate in the whole World. Government imposes 56% tax on the income of the people but the sale of residential properties is exempted from taxation.
This country is counted among top five countries in the Human Development Index. The size of the economy of this country is $302.571 billion dollars and the Per Capita Income is $53,242 per year, which is the sixth highest in the world. This country has the highest place in the world for the rights of workers. Here people are taxed at a rate of 55% on their income.
The resident of this country are not angry with the higher rate of tax because here people are more open to help the government to raise the funds for the development of the infrastructure of the country. This is probably the reason that this country is counted among the happiest countries in the World.
4. The Netherlands
Earlier this country was known as Holland. It is a densely populated country in Western Europe. It is known globally for its major shipping ports and floriculture sector. This country is ranked at the 7th place in the Human Development Index. The size of this country's economy is 762 billion dollars and Per Capita Income is 44,654 dollars per year (13th place in the world). Shipping, fishing, agriculture, trade and banking are the key sectors of 'Dutch Economy'. Here Income tax is imposed at 52% of the income of the people.
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5. Belgium: The Belgium is a sovereign country in Western Europe, surrounded by France, Netherlands and Germany. The size of the economy of this country is 470 billion dollars and the Per capita Income is 41,491 dollars (placed at 17th rank in the world). The population of this country is just 17 million. Country's main exports are machinery and equipment, chemicals, finished diamonds, metal and metal products and food items. The citizens of this country have to pay 50% of their income in the form of tax to the government.
"Austria" a Federal Republic and a country with population of more than 8.7 million is in Central Europe. Here is a well-developed social market economy that is the reason that the citizens of this country are very happy. The size of this country's economy is 387 billion dollars and Per Capita Income is 44,561dollars per year (placed 14th in the world).This German-speaking country is one of the highest tax-imposing countries in Europe. If a person is getting more than $74,442 in Austria, he has to pay income tax at the rate of 50%.
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Japan is a sovereign island nation in East Asia which is located in the Pacific Ocean. It is the only country in the World that has survived the onslaught of atomic bombs and again became the third largest economy in the World. Automobile and electronics products made in this country are highly reliable throughout the world. Here government imposes 50% tax on the income of the people.
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8. United Kingdom (Great Britain)
United Kingdom of Great Britain & Northern Ireland, commonly known as the United Kingdom (UK) or Britain; is the fifth largest economy in the world. Pharmaceutical industry, the service industry and the clothing industry play an important role in the economic development of the country. The size of the economy of Britain is 2.65 billion dollars and per capita income is$43,902.Those earning more than $234,484 in the UK are taxed at 50% rate.
Finland is a sovereign country located in Northern Europe, whose capital is Helsinki. The largest contributor to the economy is the service sector (66%), followed by manufacturing (31%) and refining sector (31%). This country has become world-renowned for its remarkable improvement in its educational infrastructure and it pays the highest salary to its teachers. The size of this country's economy is $234 billion and per capita income is 41,690 dollars a year. The person who earns more than $87,222 in this country has to deposit income tax at the rate of 49.2%.
Politically, the division of Ireland is between the Republic of Ireland (which is spread over 84% of Ireland's island) and Northern Ireland (which is part of the United Kingdom). Ireland is the second largest island of the British Isles. The size of the economy of the Republic of Ireland is 30 billion pounds, while the size of Northern Ireland's economy is 43 billion pounds. Here, companies are taxed at a rate of 12% while those earning $40,696 per year are taxed at a rate of 48%.
The highest income tax rate in India is 30%, which is levied on those whose annual income is more than Rs.10 lakhs per year. Taxes rate in India is such that it did not discourage people to earn more money. India does not impose tax on those who are earning just Rs.3 lacs in a year. After the income of more than Rs.3 lacs the rate of income tax begins from 5% and rises to 30% up to income of Rs.10 lacs. Tax rates in India are very low as compared to the countries given above, but still only 2% people of our 1300 million population pay tax in the country.