Tax structures are measured by the share of major taxes in total tax revenue. While, on average, tax levels have generally been rising, the share of main taxes in total revenues — the tax structure or tax ‘mix’ — has been remarkably stable over time. Nevertheless, several trends have emerged up to 2011 (the latest year for which data is available for all 34 OECD countries). (Table C)
Taxes on incomes and profits
- On average, OECD countries collected 33.5 per cent of their tax revenues through taxes on income and profits (personal and corporate income taxes taken together) (Table 8). Taxes on personal and corporate incomes remain the most important source of revenues used to finance public spending in just under half of all OECD countries, and in ten of them — Australia, Canada, Chile, Denmark, Iceland, Ireland, New Zealand, Norway, Switzerland and the United States — the share of income taxes in the tax mix exceeds 40 per cent – (Table 6).
- Revenues from personal income taxes fell to 24 per cent of total taxes on average in 2011 compared with 30 per cent in the mid-1980s (Table 10). About two percentage points of this reduction can be attributed to the impact on the average of a number of relatively new entrants to the OECD from Eastern Europe for which tax revenue data is only available from the 1990s onwards. These countries tend to have relatively low personal income tax revenues and high revenues from social security contributions, but this impact is observed on the post 1990 data only.
- The variation in the share of the personal income tax between countries is considerable. In 2011, it ranged from a low of 9 and 11 per cent in the Slovak Republic and the Czech Republic respectively to 39 per cent in Australia and 51 per cent in Denmark.
- The sharp fall in the share of revenues from corporate income taxes in total taxation in 2008 and 2009 did not continue into 2010 and 2011, but the share of these taxes in total revenues remains, at 9 per cent in 2011, below its 11 per cent share in 2007 (Table 12).
- The share of the corporate income tax in total tax revenues shows a considerable spread, from 3 per cent (Hungary) and 4 per cent (Estonia) to 20 per cent (Australia) and 25 per cent (Norway). Apart from the spread in statutory rates of the corporate income tax, these differences are at least partly explained by institutional factors or the exploitation of mineral deposits, for example:
- the degree to which firms in a country are incorporated,
- taxation of oil revenues,
- the erosion of the corporate income tax base, for example as a consequence of generous depreciation schemes and,
- other instruments to postpone the taxation of earned profits.
Social security contributions
- OECD countries also show a wide variety in the relative proportions of social security contributions paid by employees and employers – (Tables 16 and 18). Social security contributions as a share of total tax revenues in 2011 were highest in the Czech Republic (44 per cent) and the Slovak Republic (43 per cent). In contrast, Australia and New Zealand do not have social security contributions (Table 14).
- Between 1965 and 2011, the share of taxes on property fell from 8 to 5 per cent of total tax revenues on average.
- In relative terms, property taxes have a share exceeding 10 per cent of total tax revenue ¾ in four countries (Canada, Korea, the United Kingdom and the United States) (Table 22).
- The share of taxes on consumption (general consumption taxes plus specific consumption taxes) fell from 36 to 31 per cent between 1965 and 2011 (Table 26).
- During this period, the composition of taxes on goods and services has fundamentally changed. A fast-growing revenue source has been general consumption taxes, especially the value-added tax (VAT) which is now found in thirty-three of the thirty-four OECD countries.
- General consumption taxes presently produce 20 per cent of total tax revenue, compared with only 12 per cent in the mid-1960s (Table 28).
- In fact, the substantially increased importance of the value-added tax has served to counteract the diminishing share of specific consumption taxes, such as excises and custom duties.
- Between 1965 and 2011 the share of specific taxes on consumption (mostly on tobacco, alcoholic drinks and fuels, including some newly introduced environment-related taxes) was more than halved.
- Rates of taxes on imported goods were considerably reduced everywhere, reflecting a global trend to remove trade barriers.
- Nevertheless, countries such as Mexico (around 34 per cent) and Turkey (around 22 per cent) still collect a relatively large part of their tax revenues by way of taxes on specific goods and services (Table 30).
Table C. Tax structure in the OECD-area
Table 6. Tax revenue of main headings as percentage of total taxation, 2009
Table 8. Taxes on income and profits (1000) as percentage of total taxation
Table 10. Taxes on personal income (1100) as percentage of total taxation
Table 12. Taxes on corporate income (1200) as percentage of total taxation
Table 14. Social security contributions (2000) as percentage of total taxation
Table 16. Employees’ social security contributions (2100) as percentage of total taxation
Table 18. Employers’ social security contributions (2200) as percentage of total taxation
Table 22. Taxes on property (4000) as percentage of total taxation
Table 26. Consumption taxes (5100) as percentage of total taxation
Table 28. Taxes on general consumption (5110) as percentage of total taxation
Table 30. Taxes on specific goods and services (5120) as percentage of total taxation
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