Tax policy analysis

Tax revenues fall in OECD countries

 

15/12/2010 - Tax revenues fell in cash terms during 2009 in most OECD countries, driven downward by declining economic activity and tax cuts aimed at cushioning the effects of the recession that followed the financial crisis.

 

Tax revenues as a share of GDP - the tax burden - are also trending downward across OECD countries to the lowest level since the early 1990s. In 2007 the tax burden was 35.4 per cent, then dropped to 34.8 per cent in 2008, and fell again in 2009 to an estimated 33.7 per cent.  

 

OECD Revenue Statistics 2010 provides the latest comparable data and analysis, explains tax trends in all OECD countries, and looks back over tax revenues since 1965.

 

Recent trends in the tax burden

  • In 2008, the latest year for complete figures, the OECD-wide tax burden was 34.8%, declining from 35.4% in both 2006 and 2007.  The highest figure on record was 35.5% in the year 2000.
  • 28 OECD countries provided provisional figures for 2009. Tax to GDP ratios fell compared with 2008 in 17 countries and increased in 7. The overall average tax to GDP ratio decline is more than one percentage point from 2008 to 2009 - to below 34%.
  • This is the lowest average tax burden since the early 1990s.
  • Tax to GDP ratios have fallen for two consecutive years in almost half of the countries and for three consecutive years in Canada, France, Iceland, Ireland, New Zealand, Norway and the United Kingdom.
  • Tax revenues fell in cash terms in 2009 in all countries except Luxembourg, Switzerland and Turkey.

 

Which countries have the highest/ lowest tax burdens?

  • Denmark has the highest tax burden, closely followed by Sweden. The Danish tax burden was 48.2% in 2009, closely followed by Sweden at 46.4%. 
  • Austria, Belgium, Finland, France, Italy and Norway also have tax burdens over 40%.
  • Mexico, with a 17.5% tax to GDP ratio, and Chile, with 18.2%, have the lowest tax to GDP ratios amongst OECD countries, followed by the U.S. 24.0% and Turkey 24.6%.

 

Which countries have seen the largest changes in tax burdens since 2007?

  • The tax burden declined more than 5 percentage points between 2007 and 2009 in Spain from 37.3% to 30.7%, Iceland from 40.6% to 34.1%, and Chile from 24.0% to 18.2%.  
  • Greece, Ireland, New Zealand and the United States showed declines of 3-4 percentage points from 2007 – 2009.
  • Between 2008 and 2009, tax to GDP ratios declined by over 3 percentage points of GDP in Chile (4.3 points), Mexico (3.5 points) and Greece (3.2 points). 
  • The largest year on year increases in tax to GDP ratio in 2009 were in Luxembourg from 35.5% in 2008 to 37.5% in 2009 and Switzerland from 29.1% to 30.3%.

 

Recent trends for different types of tax

  • Personal and corporate income taxes declined to 12.5% of GDP in 2008, compared with 12.9% in 2007.
  • Falling corporate income tax revenues account for half of the fall in the average overall tax burden between 2007 and 2008, followed consumption and personal income tax.

 

Historic changes in tax structures

  • Social security contributions to total government revenues in OECD countries increased from 18% in 1965 to 25% in 2008 while corporate income taxes rose from 9% to 10%.
  • The share of personal income taxes - 26% in 1965 – was 25% in 2008.
  • The share of taxes on consumption fell from 36% in 1965 to 30% in 2008.  But the mix of taxes on goods and services has also fundamentally changed.   General consumption taxes (e.g. VAT) produced 20% of total revenue in 2007 compared with 12% in the 1960s. However this has been accompanied by a larger fall in other specific consumption taxes whose share has declined from 24% to 10%
  • The share of property taxes fell from 8% in 1965 to 5% by 2008.

 

Breakdown of revenues by level of government

  • Overall, revenues by level of government were stable throughout the 2000s with some 60% going to federal or central governments, around a quarter to social security funds and a little over 15% to state and local governments.
  • This changed in 2009 as the impact of the crisis reduced the share of total receipts going to Federal/Central government by around 2 percentage points and increased the shares for  social security funds and local government.   
       

Trends in Revenues from environmentally-related tax

  • This edition of Revenue Statistics includes a special feature on ‘green’ taxes, showing that they are a smaller portion of GDP now than 20 years ago.
  • Though governments are introducing new green taxes, eg on pollution, the bulk of revenues continues to come from taxation of road transport.

 

To obtain a copy of Revenue Statistics, journalists are invited to e-mail news.contact@oecd.org. For further information please contact OECD’s Centre for Tax Policy, Jeffrey Owens at + 331 45 24 91 08 or Stephen Matthews at + 331 45 24 93 22. For other recent tax policy publications, visit our page on Tax Reform: Restoring Growth.

 

OECD Revenue Statistics 2010

Total tax revenue as percentage of GDP, 2008 - table

Total tax revenue as percentage of GDP - chart

Tax structures in the OECD area - table

 

[1] Calculated by applying the unweighted average percentage change for 2009 in the 28 countries providing data for that year to the overall average tax to GDP ratio for 2008. 

 

 

 

Countries list

  • Afghanistan
  • Albania
  • Algeria
  • Andorra
  • Angola
  • Anguilla
  • Antigua and Barbuda
  • Argentina
  • Armenia
  • Aruba
  • Australia
  • Austria
  • Azerbaijan
  • Bahamas
  • Bahrain
  • Bangladesh
  • Barbados
  • Belarus
  • Belgium
  • Belize
  • Benin
  • Bermuda
  • Bhutan
  • Bolivia
  • Bosnia and Herzegovina
  • Botswana
  • Brazil
  • Brunei Darussalam
  • Bulgaria
  • Burkina Faso
  • Burundi
  • Cambodia
  • Cameroon
  • Canada
  • Cape Verde
  • Cayman Islands
  • Central African Republic
  • Chad
  • Chile
  • China (People’s Republic of)
  • Chinese Taipei
  • Colombia
  • Comoros
  • Congo
  • Cook Islands
  • Costa Rica
  • Croatia
  • Cuba
  • Cyprus
  • Czech Republic
  • Côte d'Ivoire
  • Democratic People's Republic of Korea
  • Democratic Republic of the Congo
  • Denmark
  • Djibouti
  • Dominica
  • Dominican Republic
  • Ecuador
  • Egypt
  • El Salvador
  • Equatorial Guinea
  • Eritrea
  • Estonia
  • Ethiopia
  • European Union
  • Faeroe Islands
  • Fiji
  • Finland
  • Former Yugoslav Republic of Macedonia (FYROM)
  • France
  • French Guiana
  • Gabon
  • Gambia
  • Georgia
  • Germany
  • Ghana
  • Gibraltar
  • Greece
  • Greenland
  • Grenada
  • Guatemala
  • Guernsey
  • Guinea
  • Guinea-Bissau
  • Guyana
  • Haiti
  • Honduras
  • Hong Kong, China
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Iraq
  • Ireland
  • Islamic Republic of Iran
  • Isle of Man
  • Israel
  • Italy
  • Jamaica
  • Japan
  • Jersey
  • Jordan
  • Kazakhstan
  • Kenya
  • Kiribati
  • Korea
  • Kuwait
  • Kyrgyzstan
  • Lao People's Democratic Republic
  • Latvia
  • Lebanon
  • Lesotho
  • Liberia
  • Libya
  • Liechtenstein
  • Lithuania
  • Luxembourg
  • Macao (China)
  • Madagascar
  • Malawi
  • Malaysia
  • Maldives
  • Mali
  • Malta
  • Marshall Islands
  • Mauritania
  • Mauritius
  • Mayotte
  • Mexico
  • Micronesia (Federated States of)
  • Moldova
  • Monaco
  • Mongolia
  • Montenegro
  • Montserrat
  • Morocco
  • Mozambique
  • Myanmar
  • Namibia
  • Nauru
  • Nepal
  • Netherlands
  • Netherlands Antilles
  • New Zealand
  • Nicaragua
  • Niger
  • Nigeria
  • Niue
  • Norway
  • Oman
  • Pakistan
  • Palau
  • Palestinian Administered Areas
  • Panama
  • Papua New Guinea
  • Paraguay
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Puerto Rico
  • Qatar
  • Romania
  • Russian Federation
  • Rwanda
  • Saint Helena
  • Saint Kitts and Nevis
  • Saint Lucia
  • Saint Vincent and the Grenadines
  • Samoa
  • San Marino
  • Sao Tome and Principe
  • Saudi Arabia
  • Senegal
  • Serbia
  • Serbia and Montenegro (pre-June 2006)
  • Seychelles
  • Sierra Leone
  • Singapore
  • Slovak Republic
  • Slovenia
  • Solomon Islands
  • Somalia
  • South Africa
  • South Sudan
  • Spain
  • Sri Lanka
  • Sudan
  • Suriname
  • Swaziland
  • Sweden
  • Switzerland
  • Syrian Arab Republic
  • Tajikistan
  • Tanzania
  • Thailand
  • Timor-Leste
  • Togo
  • Tokelau
  • Tonga
  • Trinidad and Tobago
  • Tunisia
  • Turkey
  • Turkmenistan
  • Turks and Caicos Islands
  • Tuvalu
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • United States
  • United States Virgin Islands
  • Uruguay
  • Uzbekistan
  • Vanuatu
  • Venezuela
  • Vietnam
  • Virgin Islands (UK)
  • Wallis and Futuna Islands
  • Western Sahara
  • Yemen
  • Zambia
  • Zimbabwe