OECD Taxation Working Papers

Working papers from the Centre for Tax Policy and Administration of the OECD that cover the full range of the Centre’s work on taxation with the main focus on tax policy related issues.

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The distributional effects of energy taxes

New evidence for 21 OECD countries shows that the distributional effects of energy taxes differ by energy carrier. On an expenditure basis, taxes on transport fuels are not regressive on average, as households in lower expenditure deciles spend a lower proportion of their expenditure on taxes on transport fuels. While the unweighted 21-country average of the proportion of income spent on transport fuel taxes is highest for households in the lowest and in the middle deciles, there is heterogeneity across countries. Some countries show progressive effects of taxes on transport fuels both on an expenditure and an income basis, while others show more proportional effects or tend to place the highest burden on middle expenditure deciles. Taxes on heating fuels are slightly regressive, i.e., the percentage of expenditure spent on them decreases with expenditure. Taxes on electricity are more regressive than taxes on heating fuels.


Keywords: Energy taxation, distribution services
JEL: H23: Public Economics / Taxation, Subsidies, and Revenue / Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies; Q52: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Pollution Control Adoption and Costs; Distributional Effects; Employment Effects; Q40: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Energy / Energy: General
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