COPENHAGEN, Aug 28 (Reuters) - Denmark’s right-leaning government said it aimed to cut the world’s highest rates of personal taxation to encourage people to work more and to prolong an economic upswing.
The government aims to lower taxes and levies on wages, cars, household services and pensions by 23 billion Danish crowns ($3.7 billion) per year gradually towards 2025, it said.
“With this proposal we address a number of challenges,” finance minister Kristian Jensen said in a statement.
“We increase the benefit of getting into a job, we make it more attractive to spend more time in the job, and we ensure that it makes better sense to save up to retirement,” Jensen said.
Danes pay the world’s highest tax revenue as a percentage of GDP, 46.6 percent, according to the OECD’s most recently updated figures from 2015.
Lars Lokke Rasmussen’s tri-party government holds 53 seats in parliament and needs the support from powerful ally Danish People’s Party (DF) and its 37 seats to secure the 90 seats needed to pass the proposals.
A robust performance from the Danish economy has highlighted the need for reforms to avoid labour shortages. ($1 = 6.1902 Danish crowns) (Reporting by Teis Jensen and Erik Matzen; Editing by Jacob Gronholt-Pedersen/Keith Weir)