The Danish tax system is known for its high tax rates, which fund a comprehensive welfare state. Taxes are collected at various levels, including national, regional, and municipal, covering income, value-added tax (VAT), and property taxes. The system aims to provide extensive public services such as healthcare, education, and social security. Individuals in Denmark pay a progressive income tax, meaning higher earners pay a larger percentage of their income. The VAT is set at 25%, one of the highest in the world, applied to most goods and services. This structure reflects the country's commitment to social equity and public welfare.