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OECD Reports Tax Trends For 2017

by Ulrika Lomas, Tax-News.com, Brussels

27 November 2017


Revenues from personal income taxes have increased as a percentage of total revenues in OECD countries, while social security contributions and consumption tax receipts have fallen, according to a new report.

The OECD's Revenue Statistics 2017 shows that the average share of personal income tax as a percentage of total revenue increased slightly from 2014 to 2015, from 24.1 percent to 24.4 percent. Meanwhile, the respective shares of social security contributions and taxes on goods and services, including value-added tax, fell slightly.

The data also reveals that revenues from corporate income taxes have yet to recover from the financial crisis, falling from 11.2 percent of total revenues in 2007 to a low of 8.8 percent in 2010, and remaining at a similar level (8.9 percent) in 2015.

Nevertheless, the average OECD tax burden continues to grow, with the average tax-to-GDP ratio increasing from 34 percent in 2014 to 34.4 percent in 2015. Of the 33 countries that provided preliminary data from 2016, higher tax-to-GDP ratios were seen in 20, and lower ratios observed in 13.

In 2016, the largest increases in tax-to-GDP ratios were seen in Greece (2.2 percent) and in the Netherlands (1.5 percent). The largest decreases were seen in Austria and New Zealand (one percent each).

The highest tax-to-GDP ratios last year were recorded in Denmark (45.9 percent), France (45.3 percent), and Belgium (44.2 percent) and the lowest in Mexico (17.2 percent), Chile (20.4 percent), and Ireland (23 percent). All but five countries (Canada, Estonia, Ireland, Luxembourg and Norway) have increased their tax-to-GDP ratio since 2009, the post-financial crisis low-point for tax revenues in the OECD. The pre-crisis high point has been reached or exceeded in 18 countries.

On average, the OECD tax-to-GDP ratio is now higher than at any point since 1965, including prior peaks in 2000 and in 2007.

In 2015, the share of subnational tax revenues has remained relatively stable relative to 2014 in both federal and unitary countries, according to the report. In federal countries, an average of 24.6 percent of revenues is attributed to subnational governments, with approximately one-third attributed to local governments and the remainder to state governments. In unitary countries, an average of 11.8 percent of revenues is attributed to local governments. Government-owned social security funds account for 21.1 percent and 24.4 percent in federal and unitary countries, respectively.

TAGS: tax | value added tax (VAT) | Belgium | Chile | Denmark | Ireland | Netherlands | Organisation for Economic Co-operation and Development (OECD) | Estonia | Luxembourg | Mexico | Norway | social security | Austria | Canada | France | Greece | New Zealand | revenue statistics | services

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