copy the linklink copied!1. Tax revenue trends 1965-2018

Chapter 1 provides information on trends in tax revenues in OECD countries from 1965 to 2018, including changes in tax-to-GDP ratios, tax structures, taxes by level of government and non-wastable tax credits.

    

Revenue Statistics 2019 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 1965-2017. In addition, provisional estimates of tax revenues in 2018 are included for almost all OECD countries.1

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Box 1.1. Revenue Statistics in OECD Countries – definitions & classifications

In Revenue Statistics 2019, taxes are defined as compulsory, unrequited payments to general government. Taxes are unrequited in the sense that benefits provided by government are not normally in proportion to their payments.

In the OECD classification, taxes are classified by the base of the tax:

  • Income and profits (heading 1000)

  • Compulsory social security contributions paid to general government, which are treated as taxes (heading 2000)

  • Payroll and workforce (heading 3000)

  • Property (heading 4000)

  • Goods and services (heading 5000)

  • Other (heading 6000)

Much greater detail on the tax concept, the classification of taxes and the accrual basis of reporting is set out in the OECD Interpretative Guide at annex A of Revenue Statistics 2019.

All of the averages presented in this summary are unweighted.

copy the linklink copied!Tax-to-GDP ratios

Tax ratios for 2018 (provisional data)

New OECD data in the annual Revenue Statistics 2019 publication show that on average, tax revenues as a percentage of GDP (i.e. the tax-to-GDP ratio) were virtually unchanged in 2018, with a very slight increase of just under 0.02 p.p. of GDP relative to 2017. This ends the trend of annual increases observed in the OECD average since the financial crisis in 2009, excluding 2016, which was a special case due to the one-off stability contributions in Iceland in that year.2 The small change in 2018 was largely due to the fall of 2.5 percentage points in the tax-to-GDP ratio of one country (the United States, following the reforms described below) (Figure 1.1). However, due to rounding, the OECD average tax-to-GDP ratio was 34.3% in 2018, compared to 34.2% in 2017 (34.24 % and 34.26%, respectively).

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Figure 1.1. Trends in tax-to-GDP ratios, 1965-2018p (as % of GDP)
Figure 1.1. Trends in tax-to-GDP ratios, 1965-2018p (as % of GDP)

Notes: Data for 2018 are preliminary. The OECD average in 2018 is calculated by applying the unweighted average percentage change for 2018 in the 34 countries providing data for that year to the overall average tax to GDP ratio in 2017.

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 34.0.

Source: Table 3.1.

 StatLink http://dx.doi.org/10.1787/888934054474

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Table 1.1. Revenue Statistics: overview

Tax revenue as % of GDP

Tax revenue as % of total tax revenue in 2017

2018p

2017

2016

2000

1100 Taxes on income, individuals (PIT)

1200 Taxes on income, corporates (CIT)

2000 Social security contributions (SSC)

4000 Taxes on property

5111 Value added taxes

Other consumption taxes7

All other taxes8

OECD - Average1

34.3

34.2

34.4

33.8

23.9

9.3

26.0

5.8

20.2

12.2

2.6

Australia

..

28.5

27.6

30.5

40.3

18.5

0.0

10.3

12.2

13.9

4.8

Austria

42.2

41.8

41.9

42.3

21.7

5.9

34.9

1.3

18.3

9.8

8.1

Belgium

44.8

44.5

43.9

43.5

27.2

9.3

30.5

7.9

15.2

9.0

0.9

Canada

33.0

32.8

33.2

34.7

35.7

11.4

14.1

12.0

13.7

9.9

3.2

Chile

21.1

20.1

20.1

18.8

9.7

21.1

7.3

5.4

41.6

13.2

1.8

Czech Republic

35.3

34.9

34.2

32.4

11.5

10.7

43.0

1.4

22.0

10.9

0.5

Denmark2

44.9

45.7

45.7

46.9

52.9

7.2

0.1

3.9

20.7

11.1

4.1

Estonia

33.2

32.8

33.5

31.1

17.4

4.7

34.1

0.7

27.8

14.8

0.5

Finland

42.7

43.3

44.0

45.8

29.2

6.3

27.8

3.6

21.0

11.8

0.2

France2

46.1

46.1

45.4

43.4

18.6

5.1

36.4

9.5

15.3

9.2

6.0

Germany3

38.2

37.6

37.4

36.2

27.1

5.4

37.9

2.7

18.4

7.9

0.6

Greece

38.7

38.9

38.7

33.4

16.0

5.0

29.6

7.9

20.9

18.5

2.1

Hungary

36.6

38.2

39.1

38.5

14.2

5.5

32.1

2.8

24.8

18.2

2.5

Iceland

36.7

37.5

50.8

36.0

38.0

8.2

9.1

5.5

23.8

9.9

5.5

Ireland

22.3

22.5

23.4

30.8

31.2

12.3

17.1

5.7

19.6

12.8

1.3

Israel4

31.1

32.5

31.1

34.9

20.7

10.1

16.2

10.0

22.9

11.8

8.4

Italy

42.1

42.1

42.3

40.6

25.7

5.0

30.3

6.2

14.8

13.6

4.4

Japan

..

31.4

30.7

25.8

18.8

11.8

39.9

8.2

13.0

8.0

0.2

Korea

28.4

26.9

26.2

21.5

17.9

14.2

25.7

11.7

16.0

11.8

2.8

Latvia

30.7

31.1

31.2

29.1

21.1

5.1

26.9

3.3

25.7

17.3

0.6

Lithuania2

30.3

29.5

29.7

30.8

13.1

5.1

41.5

1.0

26.6

12.0

0.8

Luxembourg

40.1

38.7

37.9

36.9

23.6

13.6

28.6

9.6

15.9

8.4

0.3

Mexico5

16.1

16.1

16.6

11.5

21.4

21.8

13.3

1.9

23.1

13.2

5.3

Netherlands

38.8

38.7

38.4

36.9

21.6

8.5

35.7

4.0

17.4

11.7

1.1

New Zealand

32.7

32.1

31.7

32.5

37.8

14.7

0.0

6.0

30.2

8.3

3.1

Norway

39.0

38.8

38.7

41.9

26.5

12.5

26.6

3.3

22.1

8.8

0.1

Poland

35.0

34.1

33.5

32.9

14.6

5.6

37.5

4.0

22.8

14.1

1.3

Portugal

35.4

34.4

34.1

31.1

18.8

9.4

26.8

3.9

25.1

14.9

1.1

Slovak Republic

33.1

33.1

32.3

33.6

10.2

10.4

43.9

1.3

21.1

12.1

1.1

Slovenia

36.4

36.3

36.5

36.6

14.2

4.9

40.0

1.8

22.3

16.3

0.5

Spain2

34.4

33.7

33.3

33.2

21.8

6.8

34.0

7.5

19.1

10.2

0.5

Sweden

43.9

44.4

44.2

48.9

29.9

6.3

21.8

2.2

20.9

6.9

11.9

Switzerland2

27.9

28.4

27.7

27.6

30.3

10.7

23.6

7.6

12.0

9.1

6.8

Turkey

24.4

24.9

25.3

23.6

14.5

6.8

29.3

4.5

20.1

23.3

1.3

United Kingdom6

33.5

33.3

32.7

32.9

27.2

8.5

19.2

12.5

20.7

11.1

0.8

United States

24.3

26.8

25.9

28.3

38.7

6.5

23.0

16.0

0.0

15.7

0.0

1. 2018 provisional average calculated by applying the unweighted average percentage change for 2018 in the 34 countries providing data for that year to the overall average tax to GDP ratio in 2017. The 2016 OECD average tax-to-GDP ratio includes the one-off revenues from stability contributions in Iceland.

2. The total tax revenue has been reduced by the amount of any capital transfer that represents uncollected taxes.

3. From 1991 the figures relate to the united Germany.

4. The data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

5. 2018 provisional: Secretariat estimate, including expected revenues collected by state and local governments.

6. Corporate income tax revenues for the United Kingdom are based on data provided in July; this was prior to revisions made to the historic Corporation tax data in September, so the revisions are not reflected here. For the latest UK Corporation tax data, please see www.gov.uk/government/statistics/corporation-tax-statistics-2019 the main revisions are explained on page 13 of https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/833371/Aug19_Receipts_NS_Bulletin_Final.odt.

7. Calculated as 5000 Taxes on goods and services less 5111 Value added taxes.

8. Includes 1300 Unallocable between personal and corporate income tax, 3000 Taxes on payroll and workforce and 6000 Other taxes.

 StatLink http://dx.doi.org/10.1787/888934054645

Country tax-to-GDP ratios in 2018 varied considerably (Table 1.1), both across countries and since 2017. Key observations include:

  • France had the highest tax-to-GDP ratio in 2018 (46.1%). Denmark, which had the highest tax-to-GDP ratio of OECD countries from 2002 to 2016, had the second-highest tax-to-GDP ratio in 2018 (44.9%). Mexico had the lowest tax-to-GDP ratio (16.1%).

  • Of the 34 countries for which data for 2018 are available, the ratio of tax revenues to GDP compared to 2017 rose in 19 and fell in 15.

  • Between 2017 and 2018, the largest tax ratio increases were in Korea and Luxembourg at 1.5 p.p. and 1.3 p.p. respectively. In Korea, the rise was due to increases in income taxes (1.1 percentage points, predominantly from corporate tax revenues following the increase in the corporate tax rate from 24.2% in 2017 to 27.5% in 2018), as well as small increases in SSCs and property taxes. In Luxembourg, the increase was predominantly due to higher revenues from income taxes (1.0 percentage points, split between personal and corporate income taxes) and smaller increases in property taxes and VAT. There were no other countries with increases of more than 1 percentage points. (Figure 1.2).

  • The largest fall in the tax-to-GDP ratio between 2017 and 2018 was in the United States (2.5 p.p.). The decrease in the United States were due to the tax reforms implemented in the Tax Cuts and Jobs Act, which lowered the corporate tax rate from 38.9% in 2017 to 25.8% in 2018 and also reduced the tax wedge on labour income via reductions to income tax rates and increases in the standard deduction and the child tax credit. These changes lead to a 1.1 percentage point decrease in income taxation (0.5 pp in personal income tax revenues and 0.7 percentage points in corporate income tax revenues). In addition, there was a decrease in property tax revenues of 1.3 percentage points, due to the one-off deemed repatriation tax on foreign earnings under the Tax Cuts and Jobs Act, which increased property tax revenues in 2017.3

  • Decreases of over 1 percentage points were also seen in Hungary (1.6 p.p.) and Israel (1.4 p.p.). The decrease in Hungary was due to a reduction in revenues from corporate income taxes (0.9 percentage points) as well as slight reductions in personal income taxes, social security contributions and VAT. There were no other countries with a decrease of over one percentage point.

    Over a longer timeframe, the OECD average tax-to-GDP ratio was higher in 2018 than in 2008, when it was 32.9% of GDP on average. Across countries, the tax-to-GDP ratio was higher in 2018 than in 2008 in 26 countries. The largest increase was seen in Greece (6.9 percentage points) and increases of over 3 percentage points were also seen in Korea, Luxembourg, Portugal, Mexico, France and the Slovak Republic). Decreases since 2008 were seen in the remaining 10 countries. The largest fall has been in Ireland, from 28.5% in 2008 to 22.3% of GDP in 2018, largely due to the exceptional increase in GDP in 2015. Larger decreases were also seen in Hungary (2.9 percentage points), Norway (2.3) and the United States (1.4) (Figure 1.2).

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Figure 1.2. Changes in tax-to-GDP ratios, p.p., 2017-18p and 2008-18p
Figure 1.2. Changes in tax-to-GDP ratios, p.p., 2017-18p and 2008-18p

Note: Preliminary data for 2018 was not available for Australia and Japan. For these countries the comparison shown is 2016-2017 and 2008-2017 data.

Source: Secretariat calculations based on Table 3.1.

 StatLink http://dx.doi.org/10.1787/888934054493

Changes in the tax-to-GDP ratio are driven by the relative changes in nominal tax revenues and in nominal GDP. From one year to the next, if tax revenues rise more than GDP (or fall less than GDP) the tax-to-GDP ratio will increase. Conversely, if tax revenues rise less than GDP, or fall further, the tax-to-GDP ratio will go down. Therefore, the tax-to-GDP ratio does not necessarily mean that the amount of tax revenues have increased in nominal, or even real, terms.

In 2018, 19 OECD countries had an increase in their tax-to-GDP ratio relative to 2017. In all of these countries, GDP growth was positive, although to a lesser degree than tax revenue growth. Of the 15 OECD countries that experienced a decline in their tax-to-GDP ratio in 2018, thirteen had higher levels of tax revenues in nominal terms than the preceding year, but the increase in nominal tax revenues was less than the increase in nominal GDP levels. Two countries (the United States and Israel) had positive nominal GDP growth and negative tax revenue growth; no countries experienced declines in nominal GDP (Figure 1.3). In Figure 1.3, changes between 2016 and 2017 are shown for Australia and Japan, where the tax-to-GDP ratio is not available in 2018. In both countries, nominal tax revenues grew faster than GDP, leading to increases in the tax-to-GDP ratio.

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Box 1.2. Methodology: the tax-to-GDP ratio

The tax-to-GDP ratios shown in Revenue Statistics 2018 express aggregate tax revenues as a percentage of GDP. The value of this ratio depends on its denominator (GDP) as well as its numerator (tax revenue), and that the denominator – GDP – is subject to historical revision.

The numerator (tax revenue)

  • For the numerator, the OECD Secretariat uses revenue figures that are submitted annually by correspondents from national Ministries of Finance, Tax Administrations or National Statistics Offices. Although provisional figures for most countries become available with a lag of about six months, finalised data become available with a lag of around one and a half years. Final revenue data for 2017 were received during the period May-August 2019.

  • In thirty-three OECD countries the reporting year coincides with the calendar year. Three countries — Australia, Japan and New Zealand — have different reporting years. Reporting year 2017 includes Q2/2017–Q1/2018 (Japan) and Q3/2017–Q2/2018 (Australia, New Zealand) respectively (Q = quarter).

The denominator (GDP)

  • For the denominator, the GDP figures used for Revenue Statistics 2019 are the most recently available in September 2019. By that time, the 2017 and 2018 GDP figures were available for all OECD countries.

  • Using these GDP figures ensures a maximum of consistency and international comparability for the reported tax-to-GDP ratios.

  • The GDP figures are based on the OECD Annual National Accounts (ANA – SNA) for the thirty-two OECD countries where the reporting year is the actual calendar year.

Where the reporting year differs from the calendar year, the annual GDP estimates are obtained by aggregating quarterly GDP estimates provided by the OECD Statistics Directorate for those quarters corresponding to each country’s fiscal (tax) year.

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Figure 1.3. Relative changes in nominal tax revenues and nominal GDP (%), 2017-18p
Figure 1.3. Relative changes in nominal tax revenues and nominal GDP (%), 2017-18p

Note: Data for Australia and Japan show the change between 2016 and 2017, as preliminary data for 2018 was not available for Australia and Japan. Data for Mexico in 2018 show a Secretariat estimate, including expected revenues collected by state and local governments.

Source: Secretariat calculations based on chapter 4 (tax revenues) and table 3.19 (GDP).

 StatLink http://dx.doi.org/10.1787/888934054512

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Figure 1.4. Tax to GDP ratios in 2017 and 2018p (as % of GDP)
Figure 1.4. Tax to GDP ratios in 2017 and 2018p (as % of GDP)

Note: Preliminary data for 2018 were not available for Australia and Japan.

Source: Secretariat calculations based on Table 3.1

 StatLink http://dx.doi.org/10.1787/888934054531

Tax-to-GDP ratios for 2017 (final data)

The latest year for which tax-to-GDP ratios are based on final revenue data and available for all OECD countries is 2017 (Figure 1.4). These data show that tax ratios vary considerably across countries:

  • In 2017, France had the highest tax-to-GDP ratio (46.1%), followed by Denmark (45.7%). Five other countries also had tax-to-GDP ratios above 40% (Belgium, Sweden, Finland, Italy and Austria).

  • Mexico had the lowest ratio at 16.1% followed by Chile (20.1%), Ireland (22.5%) and Turkey (24.9%). No other countries had a tax-to-GDP ratio of less than 25% in 2017, but five other countries had ratios below 30% ( United States, Korea, Switzerland, Australia and Lithuania)

  • The tax-to-GDP ratio in the OECD area as a whole (un-weighted average) was 34.2% in 2017. In 2016, it was 34.4% when the impact of the one-off stability contributions in Iceland is included, or 34.0% if calculated without including these one-off contributions.4

  • Relative to 2016, overall tax ratios rose in 22 OECD member countries and fell in 14.

  • The largest increases in the tax-to-GDP ratio were in Israel (1.4 percentage points) and in Australia and the United States (0.9).

  • The largest reductions were in Iceland (13.3 percentage points, due to the one-off stability contributions received in 2016), Hungary (1.0) and in Estonia and Ireland (0.8).

Between 2016 and 2017, the key changes in the tax-to-GDP ratio were largely driven by increases in revenues from income taxes (0.2 percentage points, evenly split between personal and corporate income taxes). Revenues from social security contributions, taxes on property and taxes on goods and services were unchanged, although within taxes on goods and services, the share of VAT increased slightly and the share of specific goods and services decreased slightly. Revenues from taxes on property decreased by 0.4 percentage points between 2016 and 2017, almost entirely due to the one-off stability contributions in Iceland in 2016.

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Table 1.2. Tax structures in the OECD area, selected years (unweighted average as % of GDP)
Per cent

1965

1990

2000

2007

2010

2013

2015

2016

2017

Total tax revenue

24.9

31.9

33.8

33.6

32.3

33.4

33.7

34.4

34.2

1000 Taxes on income, profits and capital gains

8.7

12.1

11.9

12.1

10.6

11.1

11.3

11.3

11.6

of which:

1100 Taxes on income, profits and capital gains of individuals

6.8

9.7

8.7

8.2

7.6

8.0

8.3

8.2

8.3

1200 Taxes on income, profits and capital gains of corporates

2.1

2.5

3.2

3.6

2.7

2.8

2.8

2.9

3.0

2000 Social security contributions (SSC)

4.5

7.3

8.6

8.4

8.8

9.0

9.0

9.1

9.1

3000 Taxes on payroll and workforce

0.3

0.3

0.4

0.3

0.3

0.4

0.4

0.4

0.4

4000 Taxes on property

1.9

1.8

1.8

1.8

1.7

1.8

1.9

2.3

1.9

5000 Taxes on goods and services

9.4

10.0

10.9

10.6

10.6

10.8

10.9

11.0

10.9

of which:

5111 Value added taxes

0.4

5.2

6.4

6.5

6.5

6.6

6.7

6.8

6.8

5121 Excises

3.5

2.6

2.9

2.6

2.7

2.6

2.6

2.6

2.5

6000 Other Taxes

0.1

0.3

0.2

0.2

0.2

0.2

0.2

0.2

0.1

Note: Percentage share of major tax categories in GDP. Data are included from 1965 onwards for Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, United Kingdom and United States; from 1972 for Korea; from 1980 for Mexico; from 1990 for Chile; from 1991 for Hungary and Poland; from 1993 for the Czech Republic and from 1995 for Estonia, Israel, Latvia, Lithuania, the Slovak Republic and Slovenia. The figures for the 2016 OECD average includes the one-off revenues from stability contributions in Iceland.

Source: OECD (2019), "Revenue Statistics: Comparative tables", OECD Tax Statistics (database), DOI: http://dx.doi.org/10.1787/data-00262-en.

 StatLink http://dx.doi.org/10.1787/888934054664

Tax ratio changes between 1965 and 2017

Between 1965 and 2017, the average tax-to-GDP ratio in the OECD area increased from 24.9% to 34.2% (an increase of 9.4 percentage points, with the difference due to rounding) (Figure 1.1).

Before the first oil shock (1973 to 1974), strong, almost uninterrupted income growth enabled tax levels to rise in all OECD countries. In part, tax levels rose automatically through the effect of fiscal drag on personal income tax schedules. From 1975 to 1985, the tax burden in the OECD area increased by 2.9 percentage points. After the mid-1970s, the combination of slower real income growth and higher levels of unemployment apparently limited the revenue raising capacity of governments. But during and after the deep recession following the second oil shock (1980), countries in Europe saw tax levels rise further, to finance higher spending on social security and rein in budget deficits.

After the mid-1980s, most OECD countries substantially reduced the statutory rates of their personal and corporate income tax, but the negative revenue impact of widespread tax reforms was often offset by reducing or abolishing tax reliefs. By 1999, the average OECD tax-to-GDP ratio had risen to 33.8%, the highest recorded level at that time. It fell back slightly between 2001 and 2004, but then rose again between 2005 and 2007 before falling back following the crisis. Taking these changes together the average tax level in the OECD area increased by 1.2 percentage points between 1995 and 2017 (Figure 1.1).

The OECD average conceals the great variety in national tax-to-GDP ratios. In 1965, tax-to-GDP ratios in OECD countries ranged from 10.6% in Turkey to 33.7% in France. By 2017 the corresponding range was from 16.1% in Mexico to 46.1% in France. The trend towards higher tax levels over this period reflects the need to finance a significant increase of public sector outlays in almost all OECD countries.

copy the linklink copied!Tax structures

Tax structures are measured by the share of major taxes in total tax revenue. In 2017, the tax structures of OECD countries varied. Eighteen countries raised the largest part of their revenues from income taxes (both corporate and personal), eleven countries raised the largest part of their revenues from SSCs, and seven countries raised the largest part of their revenues from consumption taxes (including VAT). Taxes on property and payroll taxes played a smaller role in the revenue systems of OECD countries in 2017, both on average and within most countries (Figure 1.5).

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Figure 1.5. Tax structures in 2017 (as % of total tax revenue)
Figure 1.5. Tax structures in 2017 (as % of total tax revenue)

Note: Countries are grouped and ranked by those where income tax revenues (personal and corporate) form the highest share of total tax revenues, followed by those where social security contributions, or taxes on goods and services, form the highest share.

Source: Secretariat calculations based on data in chapter 4.

 StatLink http://dx.doi.org/10.1787/888934054550

While on average tax levels have generally been rising, the tax structure or tax ‘mix’ has been remarkably stable over time. Nevertheless, several trends have emerged up to 2017 – the latest year for which data is available for all 36 OECD countries. These trends are discussed further below.

Taxes on income and profits

On average, in 2017, OECD countries collected 34.0% of their tax revenues through taxes on income and profits (personal and corporate income taxes taken together). Taxes on personal and corporate incomes remain the most important source of revenues used to finance public spending in 18 OECD countries, and in nine of them – Australia, Canada, Denmark, Iceland, Ireland, Mexico, New Zealand, Switzerland and the United States – the share of income taxes in the tax mix in 2017 exceeded 40%.

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Figure 1.6. Trends in tax structures (1965-2017, as % of total tax revenue)
Figure 1.6. Trends in tax structures (1965-2017, as % of total tax revenue)

Note: The OECD average tax revenue in 2016 from main categories includes the one-off revenues from stability contributions in Iceland. This predominately affects the average revenues from property taxes, as a percentage of total tax revenues, in that year only.

Source: Secretariat calculations based on tables 3.8 to 3.14.

 StatLink http://dx.doi.org/10.1787/888934054569

Within taxes on income and profits, the share of PIT and CIT varies:

  • Revenues from personal income taxes are 23.9% of total taxes on average in 2017 compared with around 30% in the 1980s. About two percentage points of this reduction can be attributed to the impact on the average of a number of relatively new entrants to the OECD from Eastern Europe for which tax revenue data is only available from the 1990s onwards. These countries tend to have relatively low personal income tax revenues and high revenues from social security contributions, but this impact is observed in the post 1990 data only.

  • The variation in the share of the personal income tax between countries is considerable. In 2017, it ranged from a low of 9.7% in Chile to 40.3% in Australia and 52.9% in Denmark (Figure 1.5).

  • Corporate income tax revenues represented between 7% and 9% of total tax revenues, on average, throughout the period 1965 to 2003. They then increased to a high of 11.1% in 2007, before dropping to 8.6% in 2010, directly after the financial crisis. They remained at between 8.6 and 9.0% of total revenues until 2017, when they increased to 9.3% of total tax revenues, on average.

  • The share of the corporate income tax in total tax revenues varied considerably across countries from less than 5% (Estonia, Italy and Slovenia) to 21.8% (Mexico) and 21.1% (Chile) in 2017. Apart from the spread in statutory rates of the corporate income tax, these differences are at least partly explained by institutional and country specific factors, for example:

    • the degree to which firms in a country are incorporated,

    • the breadth of the corporate income tax base, for example some narrowing may occur as a consequence of generous depreciation schemes and of tax incentives,

    • the degree of cyclicality of the corporate tax system, for which one of the important elements are loss offset provisions,

    • the extent of reliance upon tax revenues from the exploitation of oil and/or mineral deposits, and

    • other instruments to postpone the taxation of earned profits.

Social security contributions

Social security contributions as a share of total tax revenues on average across the OECD accounted for 26.0% in 2017. They were highest in the Slovak Republic and the Czech Republic (43.9% and 43.0%, respectively). In contrast, Australia and New Zealand do not levy social security contributions.

There is also wide variation across OECD countries in the relative proportions of social security contributions paid by employees and employers (Figure 1.7):

  • Seven countries (Chile, Denmark, Greece, Hungary, Israel, Luxembourg, the Netherlands, Poland, and Slovenia) raise more revenues from employee SSCs, whereas the remainder raise more from employer SSCs.

  • The highest share of employee SSC revenues are found in Slovenia, at 20.8% of total revenues. Germany, Greece, Hungary, Japan and Poland also have employee SSC revenues of over 15% of total tax revenues. Denmark had the lowest share, at 0.1% of total revenues. Apart from Denmark, only Estonia had revenues from employee SSCs of less than 5% of total revenues.

  • The highest share of employer social security contribution revenues are found in Estonia, at 32.4% of total revenues. Lithuania (28.2%), the Czech Republic (27.5%) and the Slovak Republic (25.6%) also had employer SSC revenues of over 25% of total tax revenues. Denmark and Chile had the lowest shares, at 0.03% and 0.2% of total revenues respectively.

  • The highest share of self-employed or non-employed social security contribution revenues are found in the Netherlands and the Slovak Republic, at 8.6% and 7.8% of total revenues respectively.

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Figure 1.7. Composition of social security contributions, as % of total social security contributions, 2017
Figure 1.7. Composition of social security contributions, as % of total social security contributions, 2017

Note: Australia, Iceland, Mexico and New Zealand are not included within figure 1.7. Although Iceland and Mexico collect social security contributions, disaggregated data is not available. New Zealand and Australia do not levy social security contributions.

Source: Secretariat calculations based on data in chapter 4.

 StatLink http://dx.doi.org/10.1787/888934054588

Property taxes

Between 1965 and 2017, the share of taxes on property fell from 7.9% to 5.8% of total tax revenues on average across the OECD (Figure 1.6). The United States had the highest share of property tax revenues in 2017 (16.0% of total revenues), although this was due to the one-off deemed repatriation tax which is recorded in 2017.5 Australia, Canada, the United Kingdom and Korea also had property tax revenues that amounted to more than 10% of total tax revenues. By contrast, property taxes accounted for 0.7% of total revenues in Estonia, the lowest of OECD countries and were also less than 2% in six other countries (Austria, Czech Republic, Lithuania, Mexico, Slovenia and the Slovak Republic).

Consumption taxes

  • The share of taxes on consumption (general consumption taxes plus specific consumption taxes) fell from 38.4% to 32.4% between 1965 and 2017 (Figure 1.6).

  • During this period, the composition of taxes on goods and services has fundamentally changed. A fast-growing revenue source has been general consumption taxes, especially the value-added tax (VAT) which is now imposed in thirty-five of the thirty-six OECD countries.6

  • General consumption taxes presently account for 20.8% of total tax revenue, compared with only 11.5% in the mid-1960s. In 2017, the vast majority of this was from VAT (20.2% of total tax revenues) (Figure 1.6)

  • The substantially increased importance of the value-added tax has served to counteract the diminishing share of specific consumption taxes, such as excises and custom duties.

  • Between 1975 and 2017 the share of specific taxes on consumption (mostly on tobacco, alcoholic drinks and fuels, as well as some environment-related taxes) have almost halved from 17.7% to 9.6% of total revenues. In 2017, excises were the largest single category of total revenues, accounting for 7.6% of total revenues (Figure 1.8).

  • Rates of taxes on imported goods were considerably reduced across all OECD countries, reflecting a global trend to remove trade barriers.

  • Nevertheless, countries such as Estonia, Mexico, Poland, and Slovenia (around 13%) and Turkey (around 22%) still collect a relatively large proportion of their tax revenues through taxes on specific goods and services.

copy the linklink copied!Taxes by level of government

This section discusses the relative share of tax revenues attributed to the various sub-sectors of general government in 2017. The different sub-sectors are:

  • Central government

  • State government (federal and regional countries only)

  • Local government

  • Social security funds

  • Supranational (EU countries only)

The guidelines for attributing these revenue shares to the different levels of government are based on the final version of the 2008 System of National Accounts. These guidelines are discussed in the special feature S.1 in the 2011 edition of OECD Revenue Statistics.

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Figure 1.8. Share of general consumption tax revenues (left panel) and specific consumption revenues (right panel) as % of total revenues, 1975-2017
Figure 1.8. Share of general consumption tax revenues (left panel) and specific consumption revenues (right panel) as % of total revenues, 1975-2017

Note: The unweighted average for each year includes all countries which report revenue in the categories shown in that year. The OECD averages for 2016 include the one-off revenues from stability contributions in Iceland.

Source: Secretariat calculations based on chapter 4.

 StatLink http://dx.doi.org/10.1787/888934054607

Revenues of sub-national governments

Eight OECD countries have a federal structure. Among these countries, central governments received 53.8% of total revenues in 2017 on average. The second-highest share of revenues on average was received by social security funds, which are a sub-sector of general government, at 21.0% of total revenues, followed by 17.3% at the state level and 7.7% at the local level (Table 1.3). However, within countries there was considerable variation around these means:

  • In 2017, the share of central government receipts in the eight federal OECD countries varied from 29.5% in Germany to 80.6% in Australia.

  • In 2017, the share of the states varied from 1.6% in Austria, 4.1% in Mexico and 10.8% in Belgium to 39.8% in Canada. The share of local government varied from 1.6% in Mexico to 15.3% in Switzerland.

  • Between 1975 and 2017 the share of federal government revenues declined by nearly fifteen percentage points in Belgium and to a lesser extent in Canada and Germany.

  • The share of federal government revenues increased in Austria by around 15 and five percentage points respectively. There was little change in Australia and Mexico.

  • Of the seven federal countries with social security funds, five increased the share of revenue between 1975 and 2017. The exceptions were Canada and Mexico, where the share slightly declined between 1975 (1980 for Mexico due to data availability) and 2017.

Spain is classified as a regional rather than a unitary country because of its highly decentralised political structure. In 2017 the share of central government receipts was 41.3% compared with 15.2% for the regional government. Between 1975 and 2017, the share of local government receipts increased from around 4% to 10% and the share of social security funds declined from 47.5% to 33.1%.

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Table 1.3. Attribution of tax revenues to sub-sectors of general government as % of total tax revenue, federal countries

Supranational

Central government

State or Regional government

Local government

Social Security Funds

1975

1995

2017

1975

1995

2017

1975

1995

2017

1975

1995

2017

1975

1995

2017

Federal countries

Australia

..

..

..

80.1

77.5

80.6

15.7

19.0

16.0

4.2

3.4

3.4

0.0

0.0

0.0

Austria

..

0.4

0.4

51.7

64.7

65.8

10.6

1.8

1.6

12.4

4.1

3.0

25.3

29.0

29.2

Belgium

1.4

1.0

1.0

65.3

60.1

51.4

..

1.8

10.8

4.4

4.8

4.9

28.8

32.2

32.0

Canada

..

..

..

47.6

39.1

40.9

32.5

37.1

39.8

9.9

9.8

10.3

10.0

14.0

9.1

Germany

1.2

0.6

0.6

33.5

31.4

29.5

22.3

21.6

23.5

9.0

7.4

8.6

34.0

39.0

37.9

Mexico

..

..

..

..

73.9

81.1

..

2.8

4.1

..

1.5

1.6

..

21.8

13.3

Switzerland2

..

..

..

30.7

31.2

36.5

27.0

24.3

24.6

20.3

17.7

15.3

22.0

26.8

23.6

United States

..

..

..

45.4

41.4

44.5

19.5

20.0

18.3

14.7

13.3

14.2

20.5

25.2

23.0

Unweighted average

1.3

0.7

0.7

50.6

52.4

53.8

21.3

16.1

17.3

10.7

7.8

7.7

20.1

23.5

21.0

Regional country

Spain1,2

..

0.5

0.7

48.2

51.5

41.3

..

4.7

15.2

4.3

8.6

9.7

47.5

34.7

33.1

1. Spain is constitutionally a non-federal country but has a highly decentralised political structure.

2. The total tax revenue has been reduced by the amount of any capital transfer that represents uncollected taxes.

 StatLink http://dx.doi.org/10.1787/888934054683

The remaining twenty-six OECD countries have a unitary structure. In these countries, an average of 63.8% of revenues were derived at the central level, with 24.6% accounted for by social security funds. A further 11.2% were raised by local governments. Among unitary OECD countries:

  • The share of central government receipts in 2017 varied from 34.2% in France and 36.5% in Switzerland to 93.4% in New Zealand.

  • The local government share varied from 0.9% in Estonia to 35.3% in Sweden.

  • Between 1975 and 2017 there have been shifts to local government of 5 percentage points or more in five countries – France, Iceland, Italy, Korea, Portugal and Sweden and a smaller increase in the Netherlands. Shifts of 5 percentage points or more in the other direction occurred in three countries – Ireland, Norway and the United Kingdom.7

  • Between 1975 and 2017, there were increases in the share of social security funds of 7 or more percentage points in four countries – Finland, France, Japan and Korea and corresponding decreases in four other countries – Italy, Norway, Portugal and Sweden.

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Table 1.4. Attribution of tax revenues to sub-sectors of general government as % of total tax revenue, unitary countries

Supranational

Central government

State or Regional government

Local government

Social Security Funds

1975

1995

2017

1975

1995

2017

1975

1995

2017

1975

1995

2017

1975

1995

2017

Unitary countries

Chile

..

..

..

..

89.9

86.3

..

..

..

..

6.5

7.8

..

3.6

5.9

Czech Republic

..

..

0.5

..

57.7

55.4

..

..

..

..

0.9

1.1

..

41.4

43.0

Denmark1

1.0

0.5

0.3

69.1

68.4

73.2

..

..

..

29.8

31.1

26.4

0.1

0.0

0.0

Estonia

..

..

0.6

..

84.3

82.0

..

..

..

..

0.8

0.9

..

14.9

16.6

Finland

..

0.4

0.3

56.0

46.6

48.4

..

..

..

23.5

22.3

23.5

20.4

30.8

27.8

France1

0.7

0.4

0.4

51.2

42.6

34.2

..

..

..

7.6

10.9

13.3

40.6

46.0

52.1

Greece

..

0.6

0.5

67.1

66.4

67.4

..

..

..

3.4

2.0

2.4

29.5

31.1

29.6

Hungary

..

..

0.3

..

63.8

62.4

..

..

..

..

2.5

5.8

..

33.6

31.5

Iceland

..

..

..

81.3

79.2

73.5

..

..

..

18.7

20.8

26.5

0.0

0.0

0.0

Ireland

2.3

1.5

0.6

77.4

83.1

82.5

..

..

..

7.3

2.7

2.2

13.1

12.7

14.7

Israel

..

..

..

..

79.6

76.2

..

..

..

..

6.4

7.6

..

14.0

16.2

Italy

..

0.4

0.6

53.2

62.7

53.6

..

..

..

0.9

5.4

15.5

45.9

31.5

30.3

Japan

..

..

..

45.5

41.2

37.4

..

..

..

25.6

25.2

22.7

29.0

33.6

39.9

Korea

..

..

..

89.0

69.2

57.0

..

..

..

10.1

18.7

17.3

0.9

12.1

25.7

Latvia

..

..

0.6

..

43.5

53.2

..

..

..

..

19.5

19.2

..

36.9

26.9

Lithuania1

..

..

0.9

..

71.7

56.4

..

..

..

..

2.3

1.2

..

26.1

41.5

Luxembourg

0.8

0.4

0.6

63.6

66.5

67.5

..

..

..

6.7

6.5

4.1

29.0

26.6

27.9

Netherlands

1.5

1.3

1.1

58.9

56.0

60.2

..

..

..

1.2

3.1

3.0

38.4

39.5

35.7

New Zealand

..

..

..

92.3

94.7

93.4

..

..

..

7.7

5.3

6.6

0.0

0.0

0.0

Norway

..

..

..

50.6

58.4

84.1

..

..

..

22.4

19.6

15.9

27.0

22.0

0.0

Poland

..

..

0.5

..

61.2

49.2

..

..

..

..

8.5

12.7

..

30.3

37.5

Portugal

..

0.8

0.5

65.4

72.3

72.9

..

..

..

0.0

5.4

7.1

34.6

21.5

19.5

Slovak Republic

..

..

0.5

..

62.5

55.0

..

..

..

..

1.3

1.9

..

36.2

42.5

Slovenia

..

..

0.4

..

51.8

50.7

..

..

..

..

6.3

9.4

..

41.9

39.6

Sweden

..

0.4

0.3

51.3

46.9

52.4

..

..

..

29.2

30.9

35.3

19.5

21.8

12.1

Turkey

..

..

..

..

75.1

61.2

..

..

..

..

12.8

9.5

..

12.1

29.3

United Kingdom

1.0

1.0

0.5

70.5

77.5

75.5

..

..

..

11.1

3.7

4.9

17.5

17.8

19.2

Unweighted average

1.2

0.7

0.5

65.2

65.7

63.8

..

..

..

12.8

10.4

11.2

21.6

23.6

24.6

1. The total tax revenue has been reduced by the amount of any capital transfer that represents uncollected taxes.

 StatLink http://dx.doi.org/10.1787/888934054702

The twenty-three EU member states that are also members of the OECD collect taxes on behalf of the European Union (EU). These include customs duties (Table 1.5) and Single Resolution Fund contributions (Table 1.6). For years prior to 1998, customs duties collected on behalf of the EU by national tax administrations of the EU member states are included under heading 5123. From 1998 onwards they are shown as a memorandum item since they represent a tax imposed by the EU and collected by national administrations.

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Table 1.5. Customs duties collected on behalf of the European Union
Millions of national currency

2000

2005

2007

2010

2013

2014

2015

2016

2017

2018p

Austria1

356

325

397

339

328

369

415

449

468

464

Belgium1

960

1 208

1 388

1 234

1 185

1 250

1 367

1 575

1 652

1 766

Czech Republic

..

5 586

6 443

6 573

5 556

6 970

7 912

8 033

8 271

8 296

Denmark

2 318

2 823

3 271

3 228

2 775

2 945

3 219

3 039

3 109

3 155

Estonia1

..

22

35

24

29

30

34

34

38

43

Finland1

129

148

199

151

166

170

165

163

174

174

France1

1 505

1 574

1 646

1 741

1 830

1 815

1 919

1 807

1 896

2 056

Germany1

3 394

3 433

3 972

4 234

4 251

4 608

5 195

5 089

5 043

5 018

Greece1

210

262

307

278

148

163

181

197

266

..

Hungary

..

26 572

27 981

25 004

26 337

31 947

38 960

41 620

45 403

63 431

Ireland1

208

226

273

229

247

275

327

311

334

325

Italy1

1 536

1 785

2 261

2 225

1 890

2 022

2 246

2 233

2 295

2 295

Latvia1

..

26

37

25

28

36

40

47

46

53

Lithuania

..

44

61

52

68

86

99

95

101

116

Luxembourg1

27

21

23

18

15

19

23

25

27

24

Netherlands1

1 310

1 265

1 679

1 732

1 756

2 046

2 266

2 353

2 420

2 498

Poland

..

1 285

1 760

1 627

1 977

2 316

2 823

3 292

3 485

..

Portugal1

204

145

185

177

144

149

158

174

187

226

Slovak Republic1

..

75

136

143

115

127

119

124

136

117

Slovenia1

..

34

85

59

52

52

52

53

54

57

Spain1

956

1 419

1 701

1 472

1 290

1 494

1 779

1 852

1 914

1 903

Sweden

3 450

4 327

5 099

5 412

4 976

5 737

6 243

6 044

6 225

6 498

United Kingdom

1 800

1 908

2 074

2 933

2 914

2 949

3 077

3 318

3 419

3 335

1. For euro area countries, the figures are in euros for all years.

 StatLink http://dx.doi.org/10.1787/888934054721

In addition, the Single Resolution Fund (SRF) has been in place since 2015 and countries in the Eurozone are required to make SRF contributions under the Single Resolution Mechanism (Regulation (EU) No 806/2014). Contributions are paid on an ex-ante basis and contributions are transferred from the national authorities to the SRF. So far, contributions have been collected for the years 2015 to 2018. These contributions are included in Revenue Statistics, typically under category 5126, and their amounts are summarised in Table 1.6.

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Table 1.6. Single resolution fund contributions collected on behalf of the European Union
Millions of national currency

2015

2016

2017

2018

Austria

198

204

188

199

Belgium

235

278

250

285

Estonia

..

5

5

5

Finland

76

112

122

55

France

910

1565

1910

2277

Germany

1578

1760

1710

1986

Greece

..

98

89

..

Ireland1

..

175

98

107

Italy2

..

767

2273

1447

Latvia

8

7

7

7

Lithuania

10

7

7

7

Luxembourg

29

77

100

129

Netherlands

454

502

545

621

Portugal

..

145

130

132

Slovak Republic

..

22

18

19

Slovenia

16

13

9

10

Spain

681

719

671

728

Note: These figures may differ slightly from those published on the SRB website. These differences are primarily due to timing.

1. In 2016 the figure includes the 2016 payment of 99.12 and also a payment of 75.89 which was due in quarter 4 of 2015 but was paid in quarter 1 of 2016. The figures in this table were reported by the Central Statistics Office and are gross amounts and therefore due to adjustments will differ from the figures reported on the SRB website, which are net figures.

2. The “Bank contribution to the unique European Resolution Fund” amount includes not only the European but the National resolution fund yet, as required by Eurostat classification.

Source: Revenue Statistics 2019, supplemented by discussions with delegates.

 StatLink https://doi.org/10.1787/888934054740

Composition of central and sub central revenues

Figure 1.9 shows the revenues from each major category of tax revenue for central and sub central governments. For federal and regional countries, the sub central level includes revenues received by both state and local governments. Figure 1.9 demonstrates that:

  • Central government revenues in almost all OECD countries are predominantly derived from income and goods and services taxes, with a negligible share from property taxes.

  • At the subnational level, revenue from property taxes provides a much larger share of revenues than at the central level, and accounts for over 90% of revenues in four countries (Israel, Ireland, Greece and the United Kingdom).

  • By contrast, the share of income taxes and goods and services taxes is lower at the sub-central level, the exceptions being Finland, Luxembourg and Sweden, where over 90% of sub-central revenues are derived from income taxes.

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Figure 1.9. Composition of revenues of federal or central government (left) and sub-national government (right), 2017
Figure 1.9. Composition of revenues of federal or central government (left) and sub-national government (right), 2017

Note: The left-hand panel (a) refers to only those taxes which are classified as central government taxes. Social security contributions paid to social security funds are excluded. The right-hand panel (b) refers only to those taxes which are classified as sub-central taxes (local and (where relevant) state taxes). Social security contributions paid to social security funds are excluded.

Source: Secretariat calculations based on tables 3.16 to 3.18.

 StatLink http://dx.doi.org/10.1787/888934054626

copy the linklink copied!Non-wastable tax credits

There are two kinds of tax credits that apply to income taxes (both personal and corporate):

  • Non-payable or wastable tax credits are those that can only ever be used to reduce or eliminate a tax liability. They cannot be paid out to either taxpayers or non-tax payers as a benefit. They are, therefore, the same as a tax allowance or relief.

  • In contrast, payable or non-wastable tax credits can be partitioned into two parts. One part is used to reduce or eliminate a tax liability in the same way as a wastable tax credit. The other part can be paid directly to recipients as a benefit payment, when the benefit exceeds the tax liability.

The OECD methodology for classifying non-wastable tax credits is set out in paragraphs 19 and 20 of the Interpretative Guide. This states that only the part of a non-wastable tax credit that is used to reduce or eliminate a taxpayer’s tax liability should be subtracted in the reporting of tax revenues. This is referred to as the ‘tax expenditure component’ of the credit. In contrast, the part of the tax credit that exceeds the taxpayer’s tax liability and is paid to that taxpayer is treated as an expenditure item and not subtracted in the reporting of tax revenues. This part is referred to as the ‘transfer component’.

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Table 1.7. Effect of alternative treatments of non-wastable tax credits, 2017

Non-wastable tax credits in billlions of national currency

Total tax revenue in billions of national currency

Total tax revenue as a percentage of GDP

Total value

Transfer component

Tax expenditure component

Net basis

Split basis (per current guidance)

Gross basis

Net basis

Split basis (per current guidance)

Gross basis

Australia

9.5

7.0

2.4

520.1

527.2

529.6

28.2

28.5

28.7

Austria1

0.3

0.1

0.2

154.5

154.6

154.8

41.8

41.8

41.9

Belgium

0.9

0.3

0.5

195.0

195.3

195.8

44.4

44.5

44.6

Canada2

11.6

10.5

1.1

692.2

702.7

703.8

32.3

32.8

32.9

Chile3

213.5

151.4

62.1

36 238.6

36 390.0

36 452.1

20.1

20.2

20.2

Czech Republic

35.2

8.9

26.3

1 751.2

1 760.0

1 786.4

34.7

34.9

35.4

Denmark4

4.2

0.2

4.0

995.3

995.5

999.5

45.7

45.7

45.9

France4

28.9

14.6

14.3

1 043.8

1 058.4

1 072.7

45.5

46.1

46.7

Germany

43.5

15.3

28.2

1 216.0

1 231.3

1 259.4

37.1

37.6

38.4

Iceland

2.8

2.3

0.4

979.0

981.4

981.8

37.4

37.5

37.5

Ireland

0.5

0.0

0.5

..

66.9

67.4

..

22.5

22.7

Israel5

1.6

1.6

0.0

411.8

413.4

413.4

32.4

32.5

32.5

Italy

10.3

1.2

9.1

726.6

727.8

736.8

42.1

42.1

42.7

Luxembourg6

0.2

..

..

..

..

21.4

..

..

38.7

Mexico

46.8

1.0

45.8

3 526.1

3 527.1

3 572.9

16.1

16.1

16.3

New Zealand

2.2

1.0

1.2

91.7

92.7

93.9

31.7

32.1

32.5

Norway

4.0

3.2

0.8

1 278.7

1 282.0

1 282.7

38.7

38.8

38.8

Slovak Republic6

0.3

..

..

..

..

28.1

..

..

33.1

Spain4

1.8

1.0

0.8

391.9

392.9

393.7

33.6

33.7

33.8

United Kingdom

29.5

26.0

3.5

655.9

681.9

685.4

32.0

33.3

33.4

United States

177.0

127.6

49.4

5 099.7

5 227.3

5 276.7

26.1

26.8

27.0

Note: In Revenue Statistics, the tax revenue data are reported on a split basis, unless indicated otherwise.

1. The children’s tax credit is not regarded as a tax credit in the Revenue Statistics 2018 and is treated entirely as an expenditure provision.

2. Some non-wastable tax credits cannot be split into the transfer and tax expenditure components. Their total values have been added to the transfer component.

3. In Revenue Statistics, the tax revenue data for Chile are reported on a net basis.

4. The total tax revenue has been reduced by the amount of any capital transfer that represents uncollected taxes.

5. The data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

6. In Revenue Statistics, the tax revenue data for Luxembourg and Slovak Republic are reported on a gross basis.

 StatLink http://dx.doi.org/10.1787/888934054759

Table 1.7 provides information on the non-wastable tax credits in 2017 for those countries reporting them in the Revenue Statistics 2018 (though it may be that some countries with non-wastable tax credits do not appear in the table). It shows the amounts of the non-wastable tax credits and their two components together with the results of using the figures to calculate tax revenue values and the associated tax-to-GDP ratios. Table 1.7 also shows two alternative treatments:

  • The ‘net basis’ which treats non-wastable tax credits entirely as tax provisions, so that the full value of the tax credit reduces reported tax revenues, as shown in columns 4 and 7.

  • The ‘gross basis’ is the exact opposite, treating non-wastable tax credits entirely as expenditure provisions, with neither the transfer component nor the tax expenditure component being deducted from tax revenue, as shown in columns 6 and 9. This is the approach followed by the GFSM and the SNA.

Table 1.7 shows that, with some exceptions, the choice of method for reporting non-wastable tax credits has only a small impact on the ratio of total tax revenue to GDP. For the countries with available data, the differences between the ratios on a net basis and on a gross basis are one percentage point or more in only France, Germany and the United Kingdom, and between half a percentage point and one percentage point in Australia, Canada, Czech Republic, Italy, New Zealand and the United States.

Notes

← 1. Provisional 2018 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 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 37.5% in 2017. This led to an artificial high in the OECD average tax-to-GDP ratio in 2016 of 34.4%. Without these one-off revenues in Iceland, the OECD average tax-to-GDP ratio would have been 34.0%, an increase of 0.2 p.p. relative to 2015.

← 3. In 2017, U.S. taxpayers that had un-repatriated accumulated earnings abroad incurred a tax liability on those earnings due to the new tax law. However, U.S. taxpayers may pay any tax on the deemed repatriations in instalments over eight years so there may be a significant difference in the tax liability in 2017 represented in these figures from the actual receipt of tax revenue.

← 4. See endnote 2 above.

← 5. See endnote 3 above.

← 6. The terms “value added tax” and “VAT” are used to refer to any national tax that embodies the basic features of a value added tax by whatever name or acronym it is known e.g. “Goods and Services Tax” (“GST”).

← 7. For 1975, please see Table 1.4 of Revenue Statistics.

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