The tax burden on labor income in Portugal rose by 0.3 percentage points to 41.8% in 2021 compared to 2020, counter-cycle with the drop of 0.06 percentage points, to 34.6%, from the OECD average , points out this Tuesday a report.
According to the ‘Taxing Wages 2022’ report from the Organization for Economic Cooperation and Development (OECD), in 2021 Portugal was the 10th (11th in 2020) among the 38 member countries of the organization with the highest weight of the tax burden ( IRS and list of Social Security contributions paid by the worker and the employer), Germany on the average worker led by Belgium (with 52.1%) and Austria (47.8%) and where Colombia, with a tax burden of 0.0%, occupies the last position.
The increase registered in counter-cycle with small countries in some countries of the Czech Republic percentage points recorded in the average of the tax burden that resulted from “significant decreases in a number of Czech countries”, most notably (-4.12 percentage points), Greece (- 2.23 percentage points), Latvia (-1.73 percentage points) and Australia (-1.25 percentage points).
Between 2021 tax on labor cost increased in 24 OECD countries, and changed in 12 countries and it was not even an average level for Colombia’s individual labor, the burden increased in Costa Rica.
According to the report, “although the tax burden for each type of lower number of supports, on average across the OECD over the past year, has increased from family to many” as a result of the withdrawal of pandemic-related supports.
“The increase in loads (in all countries, inclusive) and new changes were made to two, a reference in the administration of work.
“Overall — he adds — changes in the tax burden between 2019 and 2021 were consistent with long-term trends before the pandemic.”
According to OECD data, considering a family with two children, with one of the members of the couple earning the average salary, in 2021 Portugal had the 13th highest tax burden in the OECD: 30.9%, which compares with the average of 24.6% of the organization’s countries and with the 14th position occupied in 2020.
Noting that “benefits and provisions related to average children tend to reduce the tax burden for child workers, compared to the individual worker”, the OECD explains that last year, in Portugal, this reduction was 11 percentage points , higher than the OECD average of 10 percentage points.
Despite a longer period, between 2000 and 2021 percentage points, the average individual worker increased by 4 percentage points in Portugal, from 37.3% to 41.8%, while in the OECD tax burden 1.6 percentage points, 36.2% to 34.6%.
“Between 2009 and 2021, the tax burden for the average worker increased by 5.3 percentage points in Portugal”, says the OECD, adding that, “during this same period, the tax burden for the average worker across the OECD increased slowly, to 35.3% in 2013 and 2014, before decreasing again to 34.6% in 2021”.
As for families with two children and national average (and the income of this average representing 67.2% in Portugal, more taxable, 45 percentage points than in 2020, 45 percentage points than in 2020, a value that compares with an average of OECD of 28.8% in 2020.