Single workers most heavily taxed
1 March 2007, BRUSSELS - A single Belgian worker without children hands over 55.7 percent of what he costs his employer to the tax authority and social security.
1 March 2007
BRUSSELS - A single Belgian worker without children hands over 55.7 percent of what he costs his employer to the tax authority and social security.
This is the highest tax rate for single, childless workers in the developed world. Despite efforts to lower tax on wages this has not decreased over the past three years. This is contained in figures from the Organisation for Eocnomic Cooperation and Development for 2006.
This so-called tax wedge comes to above 50 percent in only three other countries: Germany, Hungary, and France. The average for the 30 OECD countries is 37.5 percent. South Korea and Mexico show the lowest rates, with less than 19 percent.
The 55.7-percent tax wedge in Belgium is comprised as follows: 21.3 percent goes to income tax, 10.7 percent to employees' social security contributions, and 23.3 percent to employers' social security contributions. The tax wedge came to 57.1 percent in 2000. It has remained stable since 2004.
The picture looks a bit rosier for single-earner, two-parent households with two children. The tax wedge for this group decreased from 42.6 percent in 2000 to 40.1 percent in 2005 and 2006. This is lower than in countries like France, Poland and Turkey, and puts Belgium sixth on that list.
Still this tax wedge is still extremely high compared to the OECD average (27.5 percent) and certainly in comparison to Ireland (2.3 percent) and New Zealand (2.6 percent).
[Copyright Expatica News 2007]
Subject: Belgian news