A Glimpse into Nordic Countries' VAT Rates

Nordic countries are located in Northern Europe. Some examples include Denmark, Norway, Sweden, Finland, and Iceland.

These countries have some of the highest Value Added Tax (VAT) rates globally.

Citing data from PricewaterhouseCoopers (PwC), Finland's VAT rate will reach 25.5% starting September 2024, making it the second highest globally.

Denmark, Norway, and Sweden each have a 25% VAT rate, while Iceland's is 24%. All are among the top 10 countries with the highest global VAT rates this year.

According to Finance Minister Sri Mulyani, cumulatively, taxes in Nordic countries can reduce citizens' total income by 65-70%.

However, with these very high taxes, citizens receive numerous benefits from the state, such as free education up to university level.

"When I became Finance Minister, people often interjected, 'Why can't we be like Nordic countries, where everything is free, even university?' From birth to university, they don't have to pay anything," said Sri Mulyani, as reported by CNN Indonesia on Thursday (30/5/2024).

"It's true the child doesn't pay, but their parents do, through taxes that can reach 65-70 percent of their income," Sri added.