COPENGAHEN: Denmark was found to have the heaviest burden of taxation as a percentage of the economy in a new study by accountancy firm UHY.
UHY studied 34 countries around the world, calculating what percentage of that country’s GDP is taken by the government in tax and found that Denmark’s tax take represented 53.5 percent of GDP in 2017.
Western European countries dominated the higher positions in the ranking, with France (51.9 percent), Italy (46.1 percent), Portugal (43.9 percent), and Germany (43.8 percent) completing the top five.
The average tax burden in Europe was 43.3 percent of GDP in 2017, while the average tax burden across the G7 was significantly lower, at 31.1 percent of GDP. The average across the “BRIC” grouping of leading emerging economies (Brazil, Russia, India, and China) was lower still at 21.8 percent, the study said.
With the United States having recently passed tax reform legislation reducing taxation by USD1.3 trillion, UHY warned other developed economies that they risk being out-competed by the US for investment unless they find ways of reducing their tax burdens.
“Developed economies need to investigate ways of lowering the tax burden for businesses or they may find increasing competition for foreign-based companies from more dynamic developed or emerging countries,” commented Rick David of UHY member firm UHY Advisors in the US.
