Tax policy analysis

Tax: Revenues rising slowly across the OECD

 

24/10/2012 - In most OECD countries tax revenues are continuing to rise in relation to GDP from the 2008-09 declines seen at the beginning of the crisis, according to OECD’s annual . OECD countries collected about 34.0%[1]of GDP in taxes in 2011, compared with 33.8% in 2010. This is still well below the most recent peak of 2007 when tax revenues to GDP ratios averaged 35.1%.

Of the 29 countries for which 2011 data are available, tax revenues rose as a proportion of GDP in 20 and fell in only 6. This demonstrates a more pronounced trend toward higher tax revenues than in 2010, when there was a more even balance of increases and decreases across countries. 

Chile, France, the Czech Republic and Germany saw the largest increases in 2011, and Hungary, Estonia and Sweden the largest falls.

Increasing tax ratios in 2010 and 2011 are due to a combination of factors.  With a progressive tax regime, economic recovery led to tax revenues rising faster than GDP and at the same time many countries raised tax rates and/or broadened bases.  In 2008 and 2009, the declining ratios reflected the severity of the recession and that some countries responded by cutting tax rates.

 

“This increase in 2011 tax revenues supports fiscal consolidation efforts in many countries”, said OECD Secretary-General Angel Gurría. “However, if OECD countries want to pursue these long-term strategies successfully, the increase in tax revenue must go hand in hand with efforts to restore long-term growth prospects, strengthen economic activity and create jobs.”

 

Revenue pressures have hit some levels of government harder than others, with the average tax ratio for local governments remaining steady since 2007 but declining for central, state and regional governments.

 

European countries most affected by the financial crisis and subsequent recession - Greece, Ireland, Portugal and Spain – experienced an initial sharp fall in tax revenues in 2008 and 2009 and a small recovery in revenues since then.

 

In the latest edition:

 

  • Chile (1.8 percentage points) and France (1.4 points) saw the largest tax ratio increases between 2010 and 2011. Other European countries with significant rises were the Czech Republic (1.1), Germany (1.0), Finland (0.9), Iceland (0.7) and the UK (0.7).
  • The largest fall was in Hungary with a decline from 37.9% of GDP to 35.7%. Two other countries - Estonia and Sweden - showed falls of one percentage point or more.
  • The increase in the US was in line with the OECD unweighted average, from 24.8% of GDP in 2010 to 25.1% in 2011.
  • Compared with 2007 (pre-crisis) ratios, tax to GDP ratios in 2011 were still down by more than 3 percentage points in four countries – Spain, Greece, Hungary and Israel. The biggest fall has been in Spain - from 37.3% of GDP in 2007 to 31.6% of GDP in 2011.
  • Historically, tax-to-GDP ratios rose through the 1990s, to a peak OECD average of 35.2% in 2000. They fell back slightly between 2001 and 2004, but then rose again between 2005 and 2007 before falling back following the crisis.
  • Denmark has the highest tax-to-GDP ratio among OECD countries (48.1% in 2011), followed by Sweden (44.5%).
  • Mexico (19.7% in 2011) and Chile (21.4%) have the lowest tax-to-GDP ratios among OECD countries. They are by followed Turkey at 25.0%, the United States which has the fourth lowest ratio in the OECD region at 25.1% and Korea at 25.9%.
  • The tax burden in Mexico increased from 17.7% to 19.7% between 2007 and 2011. Four other countries - Estonia, Germany, Luxembourg and Turkey - showed increases of 1-2 percentage points over the same period.
  • 2010 data, the latest year for which a breakdown of revenues by category of tax is available for all OECD countries, show that revenues from corporate income taxes have steadied since the sharp falls of 2008 and 2009. However the share of these taxes in total revenues remains, at 9%, somewhat below its 11% share in 2007. On the other hand, the share of social security contributions has increased by 2% points to an average of 26.4% of total revenues.

 

Further information on Revenue Statistics, including key results, is available at www.oecd.org/tax/revenuestatistics2012edition.htm. This webpage includes an “Information by Country” section which describes separately the main trends for each OECD member country.


For further information please contact OECD’s Centre for Tax Policy, Stephen Matthews at + 331 45 24 93 22 or Maurice Nettley at +331 45 24 96 17

 

>> See Table A. .

 


[1] Calculated by applying the unweighted average percentage change for 2011 in the 29 countries providing data for that year to the overall average tax to GDP ratio in 2010.

 

 

 

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