The Scandinavian countries, including Norway, charge among the highest value-added taxes in the world, topped only by Hungary, according to fresh figures from the Organisation for Economic Cooperation and Development (OECD).
The 25 percent VAT included in most all listed prices for goods and services in Norway contributes mightily to Norway’s high prices in general. Denmark and Sweden also have equally high VATs, followed by Italy, Great Britain, France and Germany.
The VAT functions much like a sales tax, which in countries like the US varies from state to state and is mostly down in single digits. Japan, for example, has had only a 5 percent VAT, but that’s now about to rise to 8 percent in an effort to pare the country’s budget deficit.
Norway also charges a 15 percent VAT on food items, which the newly elected Conservative-led government may raise to 16 percent. Norway’s VAT has risen steadily over the years, as an alternative to raising income and corporate taxes. State tax collectors believe a higher VAT reduces the chances for the state to lose tax revenues through tax evasion or legal tax avoidance methods.