Governments introduced tax reforms in 2025 to support growth and investment, but revenue-raising responses to mounting pressure on public finances generally remained modest, according to a new OECD report.
Tax Policy Reforms 2026 shows that tax policy choices diverged across countries last year, reflecting differences in economic conditions and national priorities.
The report compares tax reforms introduced or announced in 2025 across 92 jurisdictions. It assesses the various approaches countries are taking to sustainably finance public services, social protection, investment and other spending needs in a context of slow growth and rising public debt.
“Public debt across OECD countries has risen sharply, and spending pressures are growing from higher debt-servicing costs, population ageing and defence needs. Revenue collection is not keeping pace,” OECD Secretary-General Mathias Cormann said. “Targeted, growth-friendly measures to raise revenue need to be part of how governments rebuild fiscal space while safeguarding investment and living standards.”
The report finds that personal income tax (PIT) reforms generally aim to make tax systems more progressive, including through higher top PIT rates and changes to the taxation of capital income. Many countries continued to provide targeted relief to households facing cost-of-living pressures, and several introduced measures to attract and retain high-skilled workers, wealthy individuals and nationals living abroad. Social security contribution (SSC) reforms continued to move towards broader bases and higher rates in several countries, reflecting demographic pressures and the growing cost of social protection systems.
Corporate income tax (CIT) reform measures remained focused on investment and competitiveness. The average combined CIT rate was broadly stable for the third consecutive year, while governments continued to use targeted incentives to support research and development, artificial intelligence, defence and other strategically important sectors. Higher taxes on financial institutions and other highly profitable sectors became more common, often through temporary surtaxes or excess profit taxes.
VAT reforms focused on the digital economy, including extending VAT obligations to non-resident suppliers and online platforms. Health-related taxes were among the most common revenue-increasing measures in 2025, particularly taxes on cigarettes and new tobacco and nicotine products. Several countries also increased carbon taxes or expanded carbon pricing, while others reduced taxes on fuel or electricity to ease pressure on households and firms.
Property tax reforms were less frequent than reforms in other areas, but were more clearly aimed at raising revenue than in previous years, especially through recurrent taxes on immovable property.
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