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In this article, we look at the 25 countries with the highest tax-to-GDP ratios in the world. If you want to skip the detailed analysis, please proceed directly to the next page. 5 countries with the highest tax-to-GDP ratio in the world.
Tax to GDP ratio: analysis
Governments around the world derive their income primarily from taxes. There are various types of taxes, but the most common ones include income tax, sales tax, and inheritance tax. In the case of income tax, the country imposes a tax on the income of individuals and businesses. Income tax levied on companies is called corporate tax. In most countries, the bulk of government revenue comes from personal income tax, followed by corporate income tax. Welfare states usually have higher income tax rates because they use taxpayers’ money for the country’s social development. Most countries with the highest tax-to-GDP ratios Countries with the highest income tax rates in the world. on the other hand, Country with the lowest income tax rate in the world The tax-to-GDP ratio is not high, except for Kosovo, which has a high tax-to-GDP ratio.
Most European countries have high income tax rates and the highest tax-to-GDP ratio in the world. In recent years, European countries have implemented several measures to maintain tax revenue levels while saving households and businesses from high inflation, including lowering value-added taxes (VAT) and excise taxes, lowering tax rates for low-income households, and indexing income taxes. tax reform. Raise tax rates for high-income households by increasing recurrent taxes on real estate and net worth taxes.
According to the OECD Tax Reform 2023 report, many countries reported increased tax revenues after the pandemic. In 2021, the average tax-to-GDP ratio in OECD countries increased for the second consecutive year, increasing by 0.6 points from 2020 to 32.1%. This was the largest increase in the tax-to-GDP ratio across OECD countries from 1990 to 2021. 24 out of 36 countries said their tax-to-GDP ratio increased from 2020 to 2021. Meanwhile, 11 countries experienced a reduction in their tax bill. % of GDP for that period. Norway reported the largest increase in its tax-to-GDP ratio, followed by Lithuania, Spain and Germany. Corporate tax and value added tax were the main drivers of revenue growth. Conversely, Hungary experienced the largest decline in its tax-to-GDP ratio by 2.2 percentage points, followed by Canada, Iceland, Mexico, and Turkiye, which also recorded a 1.1 percentage-point decline in their tax-to-GDP ratio. -2020-2021 GDP ratio.
In recent years, countries have made notable changes to international tax rules that directly impact multinational companies. More than 130 OECD member countries will participate in 2021 agreed To the new tax system. New international tax rules mean large companies will pay more taxes in the countries where they have a consumer base and less taxes in the countries where they have headquarters, employees, and operations. The Global Tax Agreement sets a minimum tax rate of 15% and increases tax rates for companies that make profits in low-tax jurisdictions.
big players in europe
Novo Nordisk A/S (NYSE:NVO), Albotech (NASDAQ:ALVO), and Equinor ASA (NYSE:EQNR) are major companies based in European countries with some of the highest tax-to-GDP ratios in the world. .
Novo Nordisk A/S (NYSE:NVO) is one of Denmark’s leading multinational pharmaceutical companies. On January 31st, Novo Nordisk A/S (NYSE: NVO) announced its fourth quarter 2023 earnings. The company reported earnings per share of $0.71, beating consensus estimates by $0.05. Sales exceeded expectations by $636.57 million, reaching $9.55 billion.It will introduce a part of comment From the 2023 Q4 financial report:
“In 2023, our total sales increased by 36%. Sales growth was driven by both business segments, with our North American business up 54% and our international business up 15%. GLP in Diabetes -1 sales increased 52%, driven by 52% growth in North America and 53% growth in international operations. Insulin sales increased due to lower sales in the US and China regions Bariatric Care sales increased 154%. International business saw sales increase 47%, led by both Saxenda and Wegovy. Saxenda sales increased 14%, with Wegovy’s Our sales reached approximately DKK 2 billion. We will continue to deploy Wegovy in a sustainable manner, with volume caps in place to balance supply and demand.”
Equinor ASA (NYSE:EQNR) is a leading energy company headquartered in Norway. February 19th, Equinor ASA (NYSE:EQNR) signed Signed a 15-year contract with Indian company Deepak Fertilizer and Petrochemicals Corporation Limited (NSE: DEEPAKFERT) for the supply of liquefied natural gas. According to the agreement, approximately 650,000 tons of LNG will be supplied annually starting in 2026.
Albotech (NASDAQ:ALVO) is one of the leading companies specializing in biosimilars. February 24th, Albotech (NASDAQ:ALVO) announced The company announced that it has received FDA approval for SIMLANDI Injection, a biosimilar compatible with Humira. SIMLANDI helps treat conditions such as adult rheumatoid arthritis, adult psoriatic arthritis, and adult ulcerative colitis. Alvotech (NASDAQ:ALVO) received approval along with Teva Pharmaceuticals. Teva Pharmaceuticals will be his Alvotech (NASDAQ:ALVO) strategic partner in the exclusive commercialization of SIMLANDI in the United States.
These were some major companies based in Europe. Next, let’s take a look at the countries with the highest tax-to-GDP ratios in the world.
25 countries with the highest tax-to-GDP ratio in the world
our methodology
We selected the country with the highest tax revenue as a percentage of GDP in 2023. These countries are ranked in ascending order of this indicator. The data was obtained from CEIC data. We used GDP (PPP) as a tiebreaker, and GDP (PPP) data was obtained from the International Monetary Fund (IMF) database.
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25 countries with the highest tax-to-GDP ratio in the world
25. Georgia
Tax to GDP ratio: 23%
Georgia’s tax-to-GDP ratio is 23%, with a GDP of $88.09 billion. Georgia ranks 25th among countries with the highest tax-to-GDP ratio in the world.
24. Hungary
Tax to GDP ratio: 24%
Hungary’s GDP is $444.6 billion, with a tax-to-GDP ratio of 24%. Hungary has one of the highest tax to GDP ratios in the world.
23. Tunisia
Tax to GDP ratio: 24.60%
Tunisia’s GDP is $168.93 billion and the tax to GDP ratio is 24.60%.
22. Spain
Tax to GDP ratio: 24.60%
Spain is one of Europe’s largest economies. The country’s tax to GDP ratio is almost 24.60%. With a GDP of $2.51 trillion, Spain has one of the highest tax-to-GDP ratios in the world.
21. Kosovo
Tax to GDP ratio: 25.10%
Officially, the GDP of the Republic of Kosovo is $29.6 billion. The country’s tax-to-GDP ratio is 25.10%. Kosovo ranks 21st among countries with the highest tax to GDP ratio in the world.
20. Armenia
Tax to GDP ratio: 25.10%
Armenia’s tax-to-GDP ratio is 25.10%, and its GDP is $62.81 billion.
19. Ukraine
Tax to GDP ratio: 25.60%
Ukraine’s tax-to-GDP ratio is 25.60%, with a GDP of $501.07 billion. Ukraine ranks as one of the countries with the highest tax to GDP ratio in the world.
18. Netherlands
Tax to GDP ratio: 25.60%
The Netherlands is one of Europe’s largest economies. The GDP of the Netherlands is $1.34 trillion, and the tax-to-GDP ratio is 25.60%.
17. Croatia
Tax to GDP ratio: 26.20%
Croatia’s tax-to-GDP ratio is 26.20% and its GDP is $172.78 billion.
16. Finland
Tax to GDP ratio: 26.30%
Finland’s GDP is $346.97 billion, with a tax-to-GDP ratio of 26.30%. Finland is one of the countries with the highest tax to GDP ratio in the world.
15. Greece
Tax to GDP ratio: 26.70%
Greece ranks 15th among countries with the highest tax-to-GDP ratio in the world. Greece’s GDP is $434.83 billion, with a tax to GDP ratio of 26.70%.
14. Bulgaria
Tax to GDP ratio: 26.80%
Bulgaria’s GDP is $228.4 billion and the tax to GDP ratio is 26.80%.
13. Luxembourg
Tax to GDP ratio: 27.20%
Luxembourg is one of the richest countries in the world. Luxembourg’s tax to GDP ratio is 27.20%.
12. United Kingdom
Tax to GDP ratio: 27.40%
The UK is one of the world’s largest economies, with a GDP of $3.98 trillion. The UK tax to GDP ratio is 27.40%.
11. Austria
Tax to GDP ratio: 27.70%
Austria’s GDP is $645.56 billion and the tax to GDP ratio is 27.70%.
10. Italy
Tax to GDP ratio: 28.80%
Italy’s tax-to-GDP ratio is 28.80%, with a GDP of $3.29 trillion. Italy is ranked 10th in the world with the highest tax-to-GDP ratio in the world.
9. Belgium
Tax to GDP ratio: 29.70%
Belgium’s GDP is $793.83 billion, with a tax to GDP ratio of 29.70%.
8. Mongolia
Tax to GDP ratio: 31.40%
Mongolia’s tax to GDP ratio is 31.40%. With a GDP of $56.63 billion, Mongolia ranks as one of the countries with the highest tax-to-GDP ratio in the world.
7. New Zealand
Tax to GDP ratio: 31.50%
New Zealand’s GDP is $288.48 billion, with a tax-to-GDP ratio of 31.50%.
6. Norway
Tax to GDP ratio: 31.90%
Norway ranks 6th among countries with the highest tax-to-GDP ratio in the world. Norway’s tax-to-GDP ratio is 31.90%.
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Disclosure: None. 25 countries with the highest tax-to-GDP ratio in the world Originally published on Insider Monkey.
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