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Revenue Statistics 2020 Tax Revenue Trends in the OECD © OECD 2020 Revenue Statistics 2020 Tax revenue trends in the OECD © OECD 2020 The OECD freely authorises the use of this material for non-commercial purposes, provided that suitable acknowledgment of the source and copyright owner is given. All requests for commercial uses of this material or for translation rights should be submitted to [email protected]. INTRODUCTION Introduction Revenue Statistics 2020 presents detailed internationally comparable data on tax revenues of OECD countries for all levels of government. The latest edition provides final data on tax revenues in 1965-2018. In addition, provisional estimates of tax revenues in 2019 are included for almost all OECD countries.1 Box 1 Revenue Statistics in OECD Countries – definitions & classifications In Revenue Statistics 2020, taxes are defined as compulsory, l Payroll and workforce (heading 3000) unrequited payments to the general government or to a l Property (heading 4000) supranational authority. Taxes are unrequited in the sense that benefits provided by government are not normally in l Goods and services (heading 5000) proportion to their payments. l Other (heading 6000) In the OECD classification, taxes are classified by the base of the Much greater detail on the tax concept, the classification of tax: taxes and the accrual basis of reporting is set out in the OECD l Income and profits (heading 1000) Interpretative Guide at Annex A of Revenue Statistics 2020 . l Compulsory social security contributions paid to general All of the averages presented in this summary are unweighted. government, which are treated as taxes (heading 2000) Tax-to-GDP ratios TAX RATIOS FOR 2019 (PROVISIONAL DATA) New OECD data in the annual Revenue Statistics 2020 publication show that on average, tax revenues as a percentage of GDP (i.e. the tax-to-GDP ratio) were 33.8% in 2019, a decrease of 0.1 percentage points (p.p.) of GDP relative to 2018. This is the first decrease observed in the OECD average since the impact of the global financial crisis in 2009 (excluding 2017, which was a special case due to the one-off stability contributions in Iceland in 2016).2 Although the tax-to-GDP ratio increased in 20 of the countries for which 2019 data are available, the scale of the decrease in the remaining 15 countries was larger, leading to the decrease in the average. If the largest decrease, in Hungary, is excluded, the OECD average tax-to-GDP ratio would have remained unchanged. 1. Provisional 2019 figures are not available for Australia and provisional figures on social security contributions in Japan are also not available as at the time Revenue Statistics 2020 was published. 2. In 2016, Iceland received revenues from one-off stability contributions from entities that previously operated as commercial or savings banks and were concluding operations. The revenue from these contributions led to unusually high tax revenues for a single year and consequently, Iceland’s tax-to-GDP ratio rose from 35.4% in 2015 to 50.8% in 2016, before dropping to 37.6% in 2017. This led to an artificial high in the OECD average tax-to-GDP ratio in 2016 of 34.0%. Without these one-off revenues in Iceland, the OECD average tax-to-GDP ratio would have been 33.5%, an increase of 0.2 p.p. relative to 2015. © OECD 2020 1 REVENUE STATISTICS 2020 : TAX REVENUE TRENDS IN THE OECD Country tax-to-GDP ratios in 2019 varied considerably (Table 1), both across countries and since 2018. Key observations include: l Denmark had the highest tax-to-GDP ratio in 2019 (46.3%), and with the exceptions of 2017 and 2018, in which France was higher, has had the highest tax-to-GDP ratio of OECD countries since 2002. France had the second-highest tax-to-GDP ratio in 2019 (45.4%). Mexico had the lowest tax-to-GDP ratio (16.5%). l Of the 35 countries for which data for 2019 are available, the ratio of tax revenues to GDP compared to 2018 rose in 20 and fell in 15. l Between 2018 and 2019, the largest tax ratio increase was in Denmark, at 2.0 percentage points of GDP. This was due to an increase in income taxes (2.4 percentage points, offset by a fall in consumption tax revenues other than VAT). There were no other countries with increases of more than 1 percentage points. (Figure 2). l The largest fall in the tax-to-GDP ratio between 2018 and 2019 was in Hungary, at 1.7 p.p.. The decrease in Hungary was due to a reduction in revenues from corporate income taxes (0.6 percentage points of GDP) following the removal of the compulsory tax advance supplement on business taxes, as well as smaller decreases in a number of other taxes, which increased in nominal terms by less than the rate of nominal GDP. This lead to a decrease across all categories as a share of GDP. l Decreases of over one percentage points were also seen in Iceland (1.1 p.p.), Belgium and Sweden (1.0 p.p. each). In Belgium, this was due to decreases in personal and corporate income taxes. The decrease in corporate income taxes was the result of higher advance payments in 2017 and 2018 following an increase in the base rate of the tax surcharge in the event of insufficient advance payments. This temporarily inflated corporate tax revenues in 2017 and 2018, resulting in a decrease in 2019. Figure 1. Trends in tax-to-GDP ratios, 1965-2019p (as % of GDP) 50 DNK FRA OECD MEX TUR 40 30 20 10 0 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Notes: Data for 2019 are preliminary. The OECD average in 2019 is calculated by applying the unweighted average percentage change for 2019 in the 35 countries providing data for that year to the overall average tax to GDP ratio in 2018. The 2016 OECD average tax-to-GDP ratio includes the one-off revenues from stability contributions in Iceland. Without these revenues included, the OECD average tax-to-GDP ratio in 2016 would have been 33.5%. Source: Data from Revenue Statistics 2020, http://oe.cd/revenue-statistics 2 © OECD 2020 TAX-TO-GDP RATIOS Tax revenue as % of total tax revenue in 2015 Table 1. Summary of key tax revenue ratios in the OECD Tax revenue as % of GDP Tax revenue as % of total tax revenue in 2018 2019 (provisional) 2018 2017 2000 1100 Taxes on income, individuals (PIT) 1200 Taxes on income, (CIT)corporates 2000 social security contributions (SSC) on 4000 Taxes property 5111 Value added taxes Other consumption (4) taxes All other (5) taxes OECD – Average (1) 33.8 33.9 33.7 33.3 23.5 10.0 25.7 5.6 20.4 12.3 2.4 Australia – 28.7 28.5 30.5 41.1 19.1 0.0 9.5 11.7 13.8 4.8 Austria 42.4 42.2 41.8 42.3 22.2 6.4 34.8 1.3 18.0 9.7 7.6 Belgium (2) 42.9 43.9 43.8 43.8 27.0 9.8 30.2 7.8 15.4 9.8 0.0 Canada 33.5 33.2 33.1 34.7 36.2 11.3 14.0 11.6 13.6 9.9 3.3 Chile 20.7 21.1 20.2 18.8 6.7 22.1 6.9 5.2 40.2 13.0 5.8 Colombia 19.7 19.3 19.0 15.7 6.4 25.5 9.6 8.0 29.4 13.4 7.7 Czech Republic 34.9 35.0 34.4 32.3 12.2 10.4 43.8 1.3 21.6 10.7 0.0 Denmark (2) 46.3 44.4 45.8 46.9 54.4 6.5 0.1 4.1 21.5 11.4 2.0 Estonia 33.1 32.9 32.5 31.0 16.5 6.1 34.9 0.7 27.3 14.5 0.0 Finland 42.2 42.4 42.9 45.8 28.9 6.0 27.9 3.4 21.6 12.2 0.0 France (2) 45.4 45.9 46.1 43.4 20.5 4.6 34.9 9.0 15.4 11.2 4.4 Germany 38.8 38.5 37.8 36.4 27.2 5.6 37.7 2.7 18.2 8.6 0.0 Greece 38.7 38.9 38.6 33.4 16.1 5.6 29.9 7.7 21.3 18.2 1.3 Hungary 35.8 37.5 38.3 38.6 14.6 3.6 31.6 2.6 25.8 18.9 2.8 Iceland 36.1 37.2 37.6 36.0 39.7 6.5 9.5 5.5 23.6 9.7 5.5 Ireland 22.7 22.7 22.8 30.8 31.2 14.2 17.3 5.8 19.3 11.5 0.8 Israel 30.5 30.9 32.5 34.8 20.6 10.4 16.8 10.3 24.2 12.2 5.6 Italy 42.4 41.9 41.9 40.5 25.6 4.5 31.0 6.1 14.8 13.9 4.1 Japan – 32.0 31.4 25.8 19.1 12.9 40.2 8.1 12.8 6.7 0.3 Korea 27.4 26.8 25.4 20.9 18.4 15.7 25.4 11.6 15.3 11.0 2.6 Latvia 31.2 31.2 31.4 29.1 19.2 3.4 29.3 3.0 27.0 18.1 0.0 Lithuania (2) 30.3 30.2 29.5 30.8 13.5 5.1 42.1 1.0 25.8 12.6 0.0 Luxembourg (2) 39.2 39.7 37.6 36.9 23.5 15.9 27.1 9.7 15.4 8.3 0.1 Mexico (3) 16.5 16.2 16.1 11.5 21.2 21.3 13.4 2.0 24.3 12.1 5.7 Netherlands 39.3 38.8 38.7 36.9 20.5 9.0 36.0 4.0 17.6 12.6 0.3 New Zealand 32.3 32.9 31.6 32.5 37.5 15.6 0.0 5.8 29.6 8.3 3.2 Norway 39.9 39.6 38.8 41.7 25.3 16.4 25.5 3.1 21.3 8.2 0.1 Poland 35.4 35.2 34.1 32.9 15.1 5.9 37.2 3.7 23.1 14.1 0.8 Portugal 34.8 34.8 34.1 31.1 18.7 9.6 26.9 4.0 25.1 14.7 1.0 Slovak Republic 34.7 34.3 34.2 33.6 10.5 9.6 43.0 1.2 20.5 14.5 0.7 Slovenia 37.7 37.4 37.1 37.7 14.3 5.2 41.4 1.6 22.0 15.4 0.1 Spain 34.6 34.6 33.9 33.1 22.2 7.1 33.9 7.3 19.0 10.5 0.0 Sweden 42.9 43.9 44.3 48.8 29.4 6.5 21.8 2.2 21.0 7.1 12.0 Switzerland (2) 28.5 28.0 28.4 27.6 30.7 11.4 23.6 7.3 11.7 9.1 6.1 Turkey 23.1 24.0 24.7 23.5 15.4 8.7 29.9 4.3 19.8 20.7 1.1 United Kingdom 33.0 32.9 32.8 32.8 27.3 8.0 19.1 12.5 21.1 11.5 0.4 United States 24.5 24.4 26.7 28.3 41.1 4.1 24.9 12.3 0.0 17.6 0.0 – not available 1.
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