With 22.86% of the total tax and excise burden on products and services, Montenegro is at the very top of Europe, followed by Croatia with 18.54% and Bosnia and Herzegovina with 17.45%.
According to the Croatian portal Index, Montenegro is also the only European country where the tax burden on prices exceeds 20%.
The portal writes that the tax system of most countries is complicated and it is difficult to determine which country has the highest taxes. Most countries, in addition to the general VAT rate (which in Montenegro is 21%), have one or two other rate reductions. This is why it is so difficult to make comparisons, although it is clear that VAT has a direct impact on the final price that the customer must pay.
In addition to VAT, a significant burden on retail prices is excise duty, a form of tax that is classified as indirect and is included in the price. VAT and PP (consumption tax) are shown separately on the invoice, so they are more visible. They are charged for coffee, soft drinks, alcoholic drinks, tobacco and tobacco products, fuel, electricity and motor vehicles.
In order to unify all taxes and answer the question of which country has the highest tax burden, it is necessary to look at the share of taxes in the annual gross domestic product (GDP). It measures the monetary value of all products and services produced in a country during the year.
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