Romania, the second most burdensome tax regime of emerging economies with low incomes. Yet, it is the most gentle tax regime in Europe

Romania has the lowest tax burden level in Europe and one of the lowest in the world, but as compared to the average of emerging countries with low incomes the government collects among the highest taxes, a study conducted by the consulting firm UHY Hacker Young UK reveals, according to Mediafax.
With a level of tax burden of 18% of gross domestic product (GDP), Romania ranks 41 out of 53 states depending on the amount of taxes collected by the authorities, having a more welcoming tax regime as compared to the global average of 27 8% of GDP.
As compared to Europe, the share of taxes paid by companies and households in Romania is below the average in Central and Eastern Europe of 25.9% of GDP. The average level of taxation in Western Europe reaches 38.9% of GDP.
The economies of Eastern Europe and the Balkans focus on developing and manufacturing industries, offering fees and lower cost than the traditional industrial centres in the West, the survey reveals.
“For example, Romania registered last year a growth of 2.8%, due mainly to the advance of industry and communications. Romania is becoming increasingly a centre for the automotive industry, and companies like Daimler, Ford and Draexlmaier have chosen Romania in recent years instead of Germany to open new factories,” said Roy Maugham, tax department chief of the London office of UHY Hacker Young.
Although Romania offers investors the most gentle tax regime in Europe, in the low-income emerging markets such as Egypt, Croatia, Guatemala, Peru, Malaysia, and Bangladesh, the level of tax burden is above average, a higher level of taxation being registered only in Croatia (19% of GDP).
The average fees collected by low-income countries are 15.1% of GDP. The group of emerging economies with low GDP consists of Romania, Croatia, Nigeria, UAE, Puerto Rico, Guatemala, Egypt, Bangladesh, Peru, Singapore, Malaysia, Argentina, Uruguay, Jamaica and Barbados.
The UHY Hacker Young study shows Denmark has the highest tax regime in the world, 48.6% of GDP, followed by France (45% of GDP), Belgium (44.6% of GDP), Finland (44 % of GDP), Sweden (42.8%) and Italy (42.6%).
In contrast, firms and households in Nigeria pay the lowest taxes of 1.6% of GDP, followed by the United Arab Emirates (2.7% of GDP), Puerto Rico (7.6% of GDP) Egypt (10.3% of GDP).