Danish citizens trust their govt, pay almost half of income in taxes
Zubair Qureshi
Copenhagen (Denmark)
Prime Minister Imran Khan’s dream of turning Pakistan into a welfare state cannot be realized unless people fulfill their obligation and pay taxes due on them and thus contribute to country’s overall progress and prosperity.
What role taxes play in strengthening economy of a country can be understood by Denmark’s example where according to 2017 figures, taxes contributed to almost half (US $ 145 billion) of the country’s total Gross Domestic Product (GDP).
In last year it contributed more than 64pc of the GDP of the country and according to the country’s tax officials this is all because people have trust in their government and think whatever it charges from them will be spent on their health, education, social security and other benefits.
During a meeting with the senior officials of Denmark’s Taxation Ministry here on Thursday, it was revealed that Denmark was at the top in the world ranking with regard to provision of various social security benefits to its people—a welfare state ideally matching Prime Minister Imran Khan’s vision—and this is largely because of the taxes it imposes on its citizens (almost half of their income goes in taxes).
Head of International Coordination of Taxation Ministry Matthias Kisling Harris while briefing the Pakistani journalists who are currently visiting Denmark on the invitation of Denmark Embassy as part of its project “Media Inspiration of a Welfare State,” shared findings of a survey conducted recently (2018) according to which 63 per cent Danish people think they pay ‘suitable amount’ of their income in taxes while only 29 per cent thought they were paying ‘too much’.
In Denmark, he said everything is electronically registered and the government imposes taxes even on social security funds that are spent on the poor and the needy like unemployed, deserving individuals but even they willingly pay taxes as they know it is not going to be wasted.
Denmark’s taxation ministry charges both direct (income taxes) and indirect taxes, he said explaining the indirect taxes include Valued Added Taxes (VAT), Green Taxes, car registration taxes (150 percent of the car value plus 25 per cent VAT) and Church taxes.
When asked why cars are heavily taxed in Denmark, he said the purpose was to reduce emissions and the government wanted to promote a culture of bicycling and to discourage use of cars that cause pollution, accidents and shrinking of space.
On church tax he said almost 80pc of the Danish people pay church taxes (0.9pc) as every Dane who is baptized is registered with church and the money collected thus is spent on churches construction and welfare of those associated with churches.
To a question, another official of the taxation ministry Christian Brande said every Dane had a story to share as how he was supported in difficult hour by the Danish government’s social security network.
To a question, the tax officials of Denmark’s Ministry of Taxation said, while imposing taxes on the rich and the affluent, two factors are kept in mind sheer luck and hard work. If it is pure luck that has made some wealthy, he or she will have to pay heavy taxes and if he or she has earned good amount of wealth by hard work taxation will be pretty low.
To a question whether Pakistani citizens would someday realize their obligation to the country and pay taxes, one of the tax officials said Pakistan stood at a point where Denmark was once some one hundred years ago and in order to convince people to pay taxes some novel and out of box measures should be taken so that the government could win their trust and ensure the money that paid would be spent on their good.
