Life – a user's manual Part II - Boksidan

Nowadays, however, the state customs revenue is significantly smaller (see also the chapter about customs).
By contrast, VAT 17 , payroll taxes 18 and social contributions 19 constitutes the vast majority of the revenue
(61%, figure 5). The total state tax in relation to GDP is about the same in most European countries, but
social security contributions vary quite substantially (see chart 6). Would these be excluded from the
calculation, state tax would be about a quarter of GDP in almost all the studied states (mean, median, minmax):
23.1%, 23.1%, 15.8 to 31.1%.
Chart 5. Swedish government revenue in 2000, according to Statistics (Statistical Yearbook of Sweden 2005,
Statistics Sweden, Stockholm).
17.
The first version of VAT was introduced in Sweden in 1941, when the state needed more money due to
the war. After the war (1947) the tax was abolished. A new similar tax was introduced again in 1961. In
both these systems tax was only added in the final stage on the commercial chain, i.e. in the store (now
also the store, the wholesaler and others pay tax on what they buy).
Within the then EC it was in 1967 decided that all countries should have the same type of system that we
have today. Sweden joined in and introduced such VAT system 1969. Today VAT is spread all over the
world although, the tax have different names and some products/services may be exempted or have
lower VAT, for example Germany have 16% VAT, Belgium 21%, UK 17.5%, China 17%, Israel 17%,
Japan 5%, India 12.5% and Argentina 21%. The U.S., however, the U.S. does not have VAT, instead
they have the older model which is only added in the final stage and it varies across the country between
0-13%.
18.
Special payroll tax on certain earnings + tax on pension costs. The first kind is paid on dividends from
profit foundations and the like and to income from passive business. The second kind is paid on the cost
of retirement benefits.
19.
Social contributions = payroll taxes = pension contribution + health insurance contribution. These are taxes but
charges, calculated as a percentage of the wages received by employees. The charges entitlement to benefits such
as sick pays and pension and they are paid by the employer directly to the tax authorities.
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