The following pages will show how Danish local authorities are increasingly self-financed. Thus the right to levy tax has also to a large extent been decentralised. Local government expenses in percent of GNP 1991. Local government expenses in percent of total public expenses 1991. Municipal and county authority income tax is collected together with state tax and paid to the Customs and Tax Administration, which settles the amount collected with the local authorities.
Local authorities are free to set their own tax rate, called the tax levy percentage.
The tax levy percentage in a local authority is decided each year in connection with the adoption of the budget when the local authority's total income need has been calculated. The overall distribution of municipal and county authority tax levy percentages for 1995 is given in figure 8. Both municipal and county authorities levy land tax on the basis of the value of land. In municipalities the individual municipal councils decide on the fraction of the value of land, the land tax percentage, that is to be levied. The land tax percentage in municipalities must be between 0.6 and 2.4 percent.