Tax revenues recovering from financial crash, finds OECD

10 Dec 14
The tax take in advanced economies is rebounding following the financial crisis, the Organisation for Economic Co-operation and Development said today.

Its Revenue Statistics 2014 report found that the average tax burden – the ratio of total tax revenues to gross domestic product -– rose by 0.4 percentage points in 2013 to 34.1%. This was up from 33.7% in 2012 and 33.3% in 2011 and only 0.2 percentage points below the pre-crisis peak of 34.3% in 2000.

Around half of the increase was attributed to personal and corporate income taxes, which generally outpace rises in GDP. Discretionary tax changes also played a part as many countries chose to change tax rates or broaden tax bases.

The largest increases in tax take occurred in Portugal, Turkey, the Slovak Republic, Denmark and Finland. The largest falls were in Norway, Chile and New Zealand.

The figures show that Denmark has the highest tax-to-GDP ratio among OECD countries at 48.6%. This is following by France (45%) and Belgium (44.6%).

Mexico (19.7%) and Chile (20.2%) have the lowest tax-to-GDP ratio, followed by Korea (24.3%) and the US (25.4%).

The tax burden remained below pre-recession levels in three countries: Iceland, Israel and Spain. The biggest fall has been in Israel, which saw its tax take fall from 32.7% in 2007 and 30.5% in 2013.

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