TAX burdens and revenue collection
in advanced economies are reaching record levels not seen since before the
global financial crisis, but the tax mix continues varying widely across
countries, according to new OECD research published yesterday.
Revenue Statistics 2014 shows that the average tax burden in OECD countries
increased by 0.4 percentage points in 2013, to 34.1%, compared with 33.7% in
2012 and 33.3% in 2011. The tax burden is the ratio of total tax revenues to
GDP.
Historically, tax-to-GDP ratios rose through the 1990s, to a peak OECD average
of 34.3% in 2000. They fell back slightly between 2001 and 2004, but then rose
again between 2005 and 2007 before falling back following the crisis.
In 2013, the tax burden rose in 21 of the 30 countries for which data is available,
and fell in the remaining 9. The number of countries with increasing and decreasing
ratios was the same as that seen in 2012, indicating a continuing trend toward
higher revenues.
The largest increases in 2013 occurred in Portugal, Turkey, Slovak Republic,
Denmark and Finland. The largest falls were in Norway, Chile and New Zealand.
Detailed Country Notes provide further data on national tax burdens and the
composition of the tax mix in OECD countries.
A number of factors are behind the rise in tax ratios between 2012 and 2013.
About half of the increase is attributed to personal and corporate income taxes,
which are typically designed so that revenues rise faster than GDP during periods
of economic recovery. Discretionary tax changes have also played a role, as
many countries raised tax rates and/or broadened tax bases.
The new data also show rising revenues in central, state and regional governments
between 2011 and 2013, following declines over most of the 2008-10 period.
The average tax ratio for local governments increased slightly but steadily
since 2007.
Other Key Findings:
- Denmark has the highest tax-to-GDP ratio among OECD countries (48.6%), followed
by France (45%) and Belgium (44.6%).
- Mexico (19.7%) and Chile (20.2%) have the lowest tax-to-GDP ratios among
OECD countries, followed by Korea (24.3%), and the United States (25.4%).
- The tax burden remains more than 3 percentage points below the 2007 (pre-recession)
levels in three countries – Iceland, Israel and Spain. The biggest fall
has
been in Israel – from 34.7% in 2007 to 30.5% of GDP in 2013.
- The tax burden in Turkey increased from 24.1% to 29.3% between 2007 and 2013.
Three other countries - Finland, France and Greece - showed increases of more
than 2.5 percentage points over the same period.
- Revenues from personal and corporate income taxes are now recovering, after
the sharp falls of 2008 and 2009. However, the 33.6% share of these taxes in
total revenues seen in 2012 – the last year for which full data is available
- remains below the 36% share in 2007. The share of social security contributions
has increased by 1.6 percentage points, to an average 26.2% of total revenue.
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