The 19 Countries with the Highest Tax Rates in the World
The World Economic Forum’s latest Global Competitiveness Report was released on September 2015, offering an annual update on the state of the world’s economies.
The WEF uses a bundle of indicators — ranging from how easy it is to open a business, to how likely public officials are to take a bribe. One of the ones they use is the country’s tax burden, with higher scores indicating less competitiveness.
To measure it, the WEF uses the World Bank’s “total tax rate” — here’s what it uses to work it out:
The total amount of taxes is the sum of five different types of taxes and contributions payable after accounting for deductions and exemptions: profit or corporate income tax, social contributions and labor taxes paid by the employer, property taxes, turnover taxes, and other small taxes.
So it includes any taxes on labour that fall on the employer, but not ones like income tax that fall on the employee.
19. Spain: 58.2%. Though it comes in at number 19, Spain is only third of the five large European countries — two other sneak in ahead, with higher rates for businesses.
18. India: 61.7%. Finance minister Arun Jaitley aims to cut India’s corporate tax level by more than five percentage points, down to 25% over four years.
17. Tunisia: 62.4%. Though some other countries further south have steeper rates, Tunisia’s total tax rate is the second-highest in north Africa.
16. Benin: 63.3%. Though the World Bank says the country’s corporate income tax only runs to 15.9%, a bundle of other taxes raises the total rate imposed on businesses significantly.
15. Gambia: 63.3%. Without major natural resources, Gambia is among the poorest nations in the world. Taxes on turnover rather than profit raise rates for businesses significantly.
14. Chad: 63.5%. Like Gambia, chad relies on agriculture and is extremely poor. It taxes 1.5% of turnover or 40% or profits, depending on which is higher.
13. China: 64.6%. Like many other countries on the list, China levies some taxes on the turnover of businesses rather than their profit.
12. Italy: 65.4%. The country is known for its higher tax rates but gets beaten to the number 1 spot in Europe by another country.
11. Venezuela: 65.5%. The government of Venezuela pursued a higher-tax model, with dramatic increases in taxes for foreign oil companies under former President Hugo Chavez.
10. Nicaragua: 65.8%. In 2012 the International Monetary Fund (IMF) suggested that the country reduce the complexity of its corporate tax system.
9. France: 66.6%. The country tops the ranks for Europe, though the current government has pledged to reform the system and cut corporate taxes.
8. Guinea: 68.3%. Most of Guinea’s corporate taxes are paid through a flat-rate tax on turnover from the previous year.
7. Brazil: 69%. Last year Latin America’s biggest economy eliminated a 20% tax on business payrolls as part of an effort to reform its system.
6. Mauritania: 71.3%. In 2013, this agriculture-dependent country brought in a withholding tax of 15% to stop people moving payments to non-residents.
5. Algeria: 72.7%. Algeria has the highest total tax rate of any African country.
4. Colombia: 75.4%. The country brought in a new wealth tax — though it’s fourth in the world, it only comes third in Latin America for its total tax rate.
3. Tajikistan: 80.9%. The central Asian country has a 2% statutory tax rate on all turnover, which takes out a significant chunk of a company’s average profits.
2. Bolivia: 83.7%. Bolivia’s 3% tax on transactions wipes out 60% of company profits, even before other taxes are taken into account. But it still loses out to one other Latin American country.
1. Argentina: 137.3%. Astonishingly, Argentina’s total tax rate is judged to be over 100% of corporate profits. The country’s turnover tax alone eats up nearly 90%, before taxes on salaries and financial transactions are taken into account.
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Author: ARMANDO DAKO