Single Kiwis pay near-lowest tax in the OECD

  • 12/04/2017
Money
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Single, childless workers in New Zealand are surrendering much less of their wages to the state than their counterparts in Australia and the United Kingdom, according to the OECD.

The organisation's calculations of the "tax wedge" for its 35 members were released on Wednesday (NZ Time).

Single workers in Belgium pay the most tax, with 54 percent of their income going to the state.

Other highest proportions of income paid in tax

  • Germany: 49.4 percent
  • Hungary: 48.2 percent
  • France: 48.1 percent

However, workers in Chile, New Zealand and Mexico surrendered the lowest proportion of their wages to the state.

  • Mexico: 20.1 percent
  • New Zealand: 17.9 percent
  • Chile: 7 percent

Australians paid 28.6 percent and those in the UK 30.8 percent.

Taxes on labour income for the average worker across the OECD continued to decrease for the third consecutive year during 2016, dropping to 36 percent of labour costs.

"The decrease in the average tax wedge seen since 2013 is partly explained by reforms in some countries to reduce taxes on labour income," the report's authors said, citing Belgium and Austria as countries that both experienced significant reductions in 2016 as a result.

Only Greece saw an increase of more than one percentage point in the tax wedge.

The 1.06 percentage point increase was driven by an increase in both personal income tax and social security contributions.

Established in 1961, the Organisation for Economic Cooperation and Development seeks to promote policies that improve the economic and social well-being of people in its 35 member countries.

NZN

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