Turkey sits eighth on OECD tax burden roster on income
Posted by meb at April 24th, 2008
Turkey has placed eighth among all Organization for Economic Cooperation and Development (OECD) countries in terms of its tax burden on wages.
According to the Ministry of Finance Income Policies Headquarters, Turkey ranked first in 2007 with its 42.7 percent tax burden on average annual salary among 30 OECD countries; however, thanks to a change in the minimum living allowance that the government implemented on Jan. 1, 2008, Turkey dropped to eighth with its 38.9 percent tax burden. A single employee in Turkey with a gross salary of YTL 1,455 has to pay YTL 712.40 taxes on his salary; if this person is married with two children then his tax drops to YTL 689.60.
After the minimum living allowance was altered, the tax burden on salaries, which also includes insurance premiums and unemployment insurance, decreased by 3.8 percent.
Turkey comes in eighth on the list after OECD countries Sweden, Poland, Germany, Belgium, France, Hungary and Greece. The OECD countries with average salary taxes lower than Turkey are Italy, Austria, Finland, Spain, Czech Republic, Denmark, the Netherlands, Norway, Slovakia, Portugal, Japan, South Korea, Mexico and Ireland. Sweden ranked first on the OECD list with its 42.6 percent tax burden on wages, and Ireland ranked last with 9.6 percent.
The tax burden on wages is 12.2 percent in Mexico, 16 percent in South Korea, 19 percent in the US, 25.5 percent in Japan and England, 32.2 percent in the Netherlands and 38.1 percent in Italy.
According to statistics from the Income Policies Headquarters, in 2007 YTL 758 of a YTL 1,455 average gross salary — which is accepted as the average annual income for employees older than 16 — was taken as tax. The same worker’s cost to the employer was YTL 1,767.83.
Workers used to receive an average of YTL 1,009.83 after YTL 758 of their salary was deducted as tax from this amount.
After the minimum living allowance change was implemented, the cost to an employer of an employee with an average annual salary of YTL 1,455 became YTL 1,767.83.
The tax that a single employee pays from wages is YTL 712.39; the tax for an employee married with no children is YTL 703.27, while an employee with one child pays YTL 696.43, with two children YTL 689.59, with three children YTL 685.03 and with four children YTL 680.47. Considering the employer costs, the average tax on a worker’s salary is 40.3 percent if this person is single. If he/she is married with no children the average tax is 39.78 percent.
The tax burden on an employee with one child is 39.39 percent, with two children 39.01, with three children 38.75 and with four children 38.49.
source: Today’s Zaman
Related posts: