The OECD's Revenue Statistics is published every year and provides a conceptual framework to define which government receipts should be regarded as taxes and to classify different types of taxes. It presents a unique set of detailed and internationally comparable tax data in a common format from 1965 onwards. In addition to reporting trends in overall tax burdens and structures, it provides information on how these revenues accrue to different levels of government. It also shows the wide variations in these characteristics between OECD countries.
Recent issues have documented the following trends.
Tax revenues from personal and corporate income taxes rose strongly in most OECD countries in the late 1990s. The growth was strongest from 1997 to 1998, when the share of these taxes in GDP rose in 17 countries and the OECD average increased from 13.2% to 13.5%. This reverses a declining trend from 1990 to 1996, and is the main factor behind an increase in the OECD average ratio of total tax revenue to GDP from 36.8% in 1996 and 1997 to 37.0% in 1998 ( see tables).
As there was no general upward trend in statutory income tax rates in OECD countries, this growth in income tax revenues was a reflection of strong economic growth. Such growth increases the revenues from most taxes, but has a particularly strong influence on income tax revenues. In the case of personal income taxes, this is because of their progressive structure, in which a higher proportion of income is taken in tax as income rises. In the case of corporate income tax, this is because corporate profits tend to increase more than in proportion to output. The growth of this revenue was particularly strong in France and is one of the factors that have allowed the cuts in income tax rates announced recently. However, not all countries shared this trend. New Zealand, Czech Republic, Denmark, Finland, Hungary, Luxembourg, Netherlands and Poland have all seen the their ratios of income tax to GDP fall since 1996.
In contrast, the share in GDP of taxes on specific goods and services (a category that includes taxes on alcohol, tobacco and fuel) fell from an OECD average of 4.5% in 1996 to 4.1% in 1998, with 20 out of 27 countries experiencing a decline ( see tables). The fall was particularly sharp in Mexico and Poland, but there was an increase in Denmark, Spain, Switzerland and Turkey. The general fall is the continuation of a long term trend that has reduced tax revenue from specific products, expressed both as a proportion of GDP and as a proportion of total tax revenue. This has been associated with the spread in the use of general sales taxes, such as VAT, which have replaced many specific taxes on goods.
This category of taxes includes environmentally related taxes levied on goods that damage the environment. Countries also provide detailed revenue figures on some environmentally related excise taxes. With the exception of fuel taxes, most of these make only a very minor contribution to government revenues. Nonetheless, the figures reveal interesting effects. For example, Denmark reports a reduction in the revenue from the tax on nickel-cadmium rechargeable batteries, demonstrating that an environmentally successful tax can erode its own base. The tax has raised the price of these batteries (which are very toxic if put in with ordinary rubbish) to such an extent that consumers have switched to other, less environmentally damaging, alternatives. (For more information on the exact rules governing both energy taxes and other environmentally related taxes in Member countries, see the Environmentally Related Taxes database,)
Revenue Statistics does not provide figures for the total revenue from environmentally related taxes. However, it is possible to identify the revenue from the group of such taxes that raises much the largest amount of revenue: excise taxes on transport fuels. The relative importance of these revenues has stayed remarkably constant in industrialised countries over the past few years. Although some countries showed an increase from 1996 to 1998, 11 out of the 22 OECD countries that separately identify revenues from such taxes reported a reduction in their contribution to total revenue ( see charts).
Taxing Wages provides unique information on income tax paid by workers and social security contributions levied on employees and their employers in OECD countries. Special Feature: Tax Reforms and Tax Burdens 2000-2006.
