Death and income tax are the only things certain in this world. Of course that quote doesn’t put the tax evaders and the tax havens in the picture. Unlike death, income tax can be evaded. Not that you should.
Living in India, I thought taxes were high. But this interactive infographic has shown what a taxing world we are living in. In fact, taxes in India aren’t either high or low. They seem to be at the mean of the global average.
Landlocked African nation, Chad, has the most income tax rate of 60% followed by Sweden’s 56.74%. Japan (50%) and Australia (45%) are other nations which have high income tax rates. India’s 30% income tax rate is close to United States 35%, though India has a layered approach to Income tax.
There are three different slabs on the income tax : 10%, 20% and 30%. On average it can come to 25%-30% for people earning a certain amount of salary (something over 15 lakh rupees or so).
Income tax in India is a funny thing because the government decides to squeeze whoever pays without any mechanism to bring everyone into the tax net. It’s not about taxing the rich or taxing the middle class. Tax Deduction at Source or TDS as it is famously called is only applicable for salaried individuals. Just yesterday, the finance ministry had this wicked idea of bringing some perks like conveyance allowance and car lease under General Anti-avoidance Rules (GAAR). These were allowed by the government in the first place.
Of course there are countries with lower tax rates and there are countries with no taxes at all. Saudi Arabia, UAE and Oman are the three countries which don’t have any taxes imposed on their citizens. No taxes also means no accountability by the government. Paying taxes doesn’t mean the government is accountable either.
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