Despite the common belief about high taxes, residents of Latvia retain a larger portion of their earnings after taxes than residents of many Western European countries. However, the issue lies not so much in tax rates as in income levels and the quality of public services.
According to calculations by Euronews based on data from the Organisation for Economic Co-operation and Development (OECD), residents of Eastern European countries, on average, take home a larger portion of their salary than residents of Western Europe, writes Latvijas Avīze.
A hypothetical example of a person without children and a spouse with an annual income of 100,000 euros before taxes was used for comparison. This approach allows for a comparison of the tax burden between different countries, although actual amounts can vary significantly depending on family status, the presence of children, and the specifics of national tax systems.
Bulgaria showed the best result, where after paying taxes, 86,930 euros remain from 100,000 euros. Estonia came in second with a figure of 74,400 euros. Following are the Czech Republic, Malta, Switzerland, and Cyprus, where workers retain over 70% of their earned income.
Latvia is among the group of countries where between 60,000 and 70,000 euros remain after taxes. With a result of 66,200 euros, the country ranked 11th among European states, surpassing many Western European countries. For comparison, in Lithuania, about 60,500 euros remain after taxes.
At the opposite end of the ranking is Belgium, where from the earned 100,000 euros, a worker receives only 50,750 euros. Following are Denmark and Sweden — countries often cited as examples of a high standard of living and social security.
In Denmark, about 51,500 euros remain after taxes, while in Sweden, approximately 52,200 euros.
The comparison shows that the common perception of excessively high taxes in Latvia does not fully correspond to reality. In terms of tax burden, the country is closer to states with relatively moderate taxation.
Moreover, the difference between Eastern and Western Europe lies not only in the size of taxes. In Northern and Western European countries, a higher tax burden is accompanied by higher income levels and a broader range of public services — from healthcare and education to social support and public safety.
Therefore, for many residents of Latvia, the key issue remains not so much the size of taxes but the level of wages. Even while retaining a larger share of income after taxes, residents of the country often receive significantly lower amounts in absolute terms compared to the populations of wealthier European states.
This is why the discussion about welfare increasingly revolves not around the issue of tax reduction but around the need to enhance economic productivity, attract investments, and create conditions for income growth.
