'Indian employees are highest tax payers'

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Monday , November 19, 2007 at 1902 hrs Employees in India are the biggest contributors to the governments' coffers among their Asian peers on the basis of percentage of gross salary paid towards taxes and other payments such as social security contributions, according to a new study.

Indian employees take a deduction of as much as 29.1 per cent from their gross salary, against just five per cent in the UAE, making it home to the world's most benign personal tax environment, international HR consultancy firm Mercer said in a report published today.

The UAE does not assess any income tax and the five per cent deduction from an employee's gross salary is towards the country's social security contributions. Belgium, Denmark and

Hungary have been named as the least attractive nations across the world.

Mercer's Worldwide Individual Tax Comparator Report analysed the tax and benefits systems across 32 countries focusing on personal tax structures, average salaries and marital status.

The survey also found that married employees are better off than single employees while married employees with two children fare the best.

"Marital status is still a major factor in determining local tax rates. The data highlights the fluctuation in tax rates applied according to an employee's income level and marital status," the report said.