Denmark, Belgium and France are the highest taxed EU countries according to research by the bloc’s statistical agency Eurostat.

The data in Eurostat’s report on ‘Taxation trends’ in the EU, published on Monday (16 June), found that the Danish government collected tax worth 48.1 percent of economic output in 2012.

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At the other end of the scale, Lithuanians are the lowest taxed in Europe, with a burden worth 27.2 percent of output, closely followed by Bulgaria and Latvia.

Overall, the average tax-to-GDP ratio in the EU increased to 39.4 percent in 2012, slightly up from 38.8 percent the previous year. Eurostat says the rate continued to rise in 2013.

Tax levels have increased in each of the last three years, and are at their highest level since 2001. Twenty two of the EU’s 28 countries recorded tax increases in 2012. Six countries - UK, Sweden, Slovakia, Romania, Portugal and Lithuania - saw a fall in their tax-to-GDP ratio with the largest single fall of 0.9percent in Portugal.

Income taxes make the largest single contribution to national tax revenues across the bloc, representing 51 percent of total revenues.

The EU continues to have some of the highest taxed countries in the world. Of the major OECD countries outside the bloc, only Norway, at 42 percent, has a higher tax burden. Meanwhile, the US, Canada and Japan have rates of 25 percent, 28 percent and 30 percent, respectively.

Countries in the north and west of Europe are known for combining high taxes with generous welfare and pension schemes.

For their part, the former eastern bloc countries which joined the EU in 2004 and 2007 orient their systems more towards low tax regimes, with five countries using a flat income tax system.

“Labour taxation is still too high,” said EU taxation commissioner Algirdas Semeta in a statement. He added that environmental taxes were “under-used” in the EU, and that governments could cut their headline rates on VAT, the main EU tax on consumption.

Shifting taxation away from labour would “allow our businesses to regain competitiveness", he commented.

The commission is keen for governments to shift their tax regimes away from labour to environmental taxation, as well as higher levies on property and assets, which are easy to collect.

The value of property and assets has risen far quicker than incomes across Europe. However, consumption taxes on everyday items such as food, utility bills and petrol disproportionately hit people on lower wages.

Tax on property could be used to control booms in the housing market.

The commission has no powers to change national tax policies but has proposed reforms such as a tax on financial transactions set to be introduced by 11 member states, as well as revising the VAT system and promoting a common corporate tax base.