Transcription

RevenueStatistics 2020Tax revenue trendsin the OECD

OECD 2020The OECD freely authorises the use of this material for non-commercialpurposes, provided that suitable acknowledgment of the source andcopyright owner is given. All requests for commercial uses of this materialor for translation rights should be submitted to [email protected]

INTRODUCTIONIntroductionRevenue Statistics 2020 presents detailed internationally comparable data on tax revenues of OECD countriesfor all levels of government. The latest edition provides final data on tax revenues in 1965-2018. In addition,1provisional estimates of tax revenues in 2019 are included for almost all OECD countries.Box 1 Revenue Statistics in OECD Countries – definitions & classificationsIn Revenue Statistics 2020, taxes are defined as compulsory,unrequited payments to the general government or to asupranational authority. Taxes are unrequited in the sensethat benefits provided by government are not normally inproportion to their payments.In the OECD classification, taxes are classified by the base of thetax:lIncome and profits (heading 1000)Compulsory social security contributions paid to generalgovernment, which are treated as taxes (heading 2000)llPayroll and workforce (heading 3000)lProperty (heading 4000)lGoods and services (heading 5000)lOther (heading 6000)Much greater detail on the tax concept, the classification oftaxes and the accrual basis of reporting is set out in the OECDInterpretative Guide at Annex A of Revenue Statistics 2020 .All of the averages presented in this summary are unweighted.Tax-to-GDP ratiosTAX RATIOS FOR 2019 (PROVISIONAL DATA)New OECD data in the annual Revenue Statistics 2020 publication show that on average, tax revenues as apercentage of GDP (i.e. the tax-to-GDP ratio) were 33.8% in 2019, a decrease of 0.1 percentage points (p.p.) of GDPrelative to 2018. This is the first decrease observed in the OECD average since the impact of the global financialcrisis in 2009 (excluding 2017, which was a special case due to the one-off stability contributions in Iceland in2016).2 Although the tax-to-GDP ratio increased in 20 of the countries for which 2019 data are available, the scaleof the decrease in the remaining 15 countries was larger, leading to the decrease in the average. If the largestdecrease, 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 revenuefrom 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 been33.5%, an increase of 0.2 p.p. relative to 2015. OECD 20201

REVENUE STATISTICS 2020 : TAX REVENUE TRENDS IN THE OECDCountry tax-to-GDP ratios in 2019 varied considerably (Table 1), both across countries and since 2018.Key observations include:lllllDenmark had the highest tax-to-GDP ratio in 2019 (46.3%), and with the exceptions of 2017 and 2018, inwhich France was higher, has had the highest tax-to-GDP ratio of OECD countries since 2002. France had thesecond-highest tax-to-GDP ratio in 2019 (45.4%). Mexico had the lowest tax-to-GDP ratio (16.5%).Of the 35 countries for which data for 2019 are available, the ratio of tax revenues to GDP compared to 2018rose in 20 and fell in 15.Between 2018 and 2019, the largest tax ratio increase was in Denmark, at 2.0 percentage points of GDP. Thiswas due to an increase in income taxes (2.4 percentage points, offset by a fall in consumption tax revenuesother than VAT). There were no other countries with increases of more than 1 percentage points. (Figure 2).The largest fall in the tax-to-GDP ratio between 2018 and 2019 was in Hungary, at 1.7 p.p. The decrease inHungary 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 smallerdecreases 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.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 corporateincome taxes was the result of higher advance payments in 2017 and 2018 following an increase in the baserate of the tax surcharge in the event of insufficient advance payments. This temporarily inflated corporatetax revenues in 2017 and 2018, resulting in a decrease in 2019.Figure 1. Trends in tax-to-GDP ratios, 1965-2019p (as % of 5199019952000200520102015Notes: 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 tothe 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 2016would have been 33.5%.Source: Data from Revenue Statistics 2020, http://oe.cd/revenue-statistics2 OECD 2020

TAX-TO-GDP RATIOSTax revenuTable 1. Summary of key tax revenue ratios in the OECDAustralia2018201720001100 Taxeson income,individuals (PIT)1200 Taxeson income,corporates (CIT)2000 social securitycontributions(SSC)4000 Taxes onproperty5111 Valueadded taxesOtherconsumptiontaxes (4)All othertaxes (5)OECD – Average (1)Tax revenue as % of total tax revenue in 20182019 (provisional)Tax revenue as % of 41.842.322.26.434.81.318.09.77.6Belgium .319.015.76.425.59.68.029.413.47.7Czech Denmark .242.442.945.828.96.027.93.421.612.20.0France .33.027.018.10.0Lithuania ourg (2)39.239.737.636.923.515.927.19.715.48.30.1Mexico rlands39.338.838.736.920.59.036.04.017.612.60.3New 4.834.834.131.118.79.626.94.025.114.71.00.7Slovak 943.944.348.829.46.521.82.221.07.112.0Switzerland 23.124.024.723.515.48.729.94.319.820.71.1United nited States24.524.426.728.341.14.124.912.30.017.60.0– not available1. 2019 provisional average 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 2018.2. The total tax revenue has been reduced by the amount of any capital transfer that represents uncollected taxes.3. 2019 provisional: Secretariat estimate, including expected revenues collected by state and local governments.4. Calculated as 5000 Taxes on goods and services less 5111 Value added taxes.5. Includes 1300 Unallocable between personal and corporate income tax, 3000 Taxes on payroll and workforce and 6000 Other taxes.Source: Data from Revenue Statistics 2020, http://oe.cd/revenue-statistics OECD 20203

REVENUE STATISTICS 2020 : TAX REVENUE TRENDS IN THE OECDFigure 2. Changes in tax-to-GDP ratios, 2018-19p and 2009-19p (percentage points)Percentage point change 2018-2019Percentage point change XNORSVKCOLCHEITANLDJPNKOR-6DNK-3Note: Preliminary data for 2019 was not available for Australia and Japan. For these countries the comparison shown is 2017-2018 and 2009-2018 data.Source: Data from Revenue Statistics 2020, http://oe.cd/revenue-statisticsOver a longer timeframe, the OECD average tax-to-GDP ratio was higher in 2019 than in 2009, when it was 31.8%of GDP on average.3 Across countries, the tax-to-GDP ratio was higher in 2019 than in 2009 in 31 countries. Thelargest increase was seen in Greece (8.0 percentage points) and increases of over 5 percentage points were alsoseen in Japan (2018 data) and the Slovak Republic. Decreases since 2009 were seen in the remaining 6 countries.The largest fall has been in Ireland, from 28.0% in 2009 to 22.7% of GDP in 2019, largely due to the exceptionalincrease in GDP in 2015. The next largest decrease was seen in Hungary (3.1 percentage points) (Figure 2).Changes in the tax-to-GDP ratio are driven by the relative changes in nominal tax revenues and in nominalGDP. From one year to the next, if tax revenues rise more than GDP (or fall less than GDP) the tax-to-GDP ratiowill 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 innominal, or even real, terms.In 2019, 20 OECD countries had an increase in their tax-to-GDP ratio relative to 2018. In all of these countries,GDP growth was positive, although to a lesser degree than tax revenue growth. Of the 15 OECD countries thatexperienced a decline in their tax-to-GDP ratio in 2019, thirteen had higher levels of tax revenues in nominalterms than the preceding year, but the increase in nominal tax revenues was less than the increase in nominalGDP levels. One country (New Zealand) had positive nominal GDP growth and negative tax revenue growth;no countries experienced declines in nominal GDP (Figure 3). In Figure 3, changes between 2017 and 2018 areshown for Australia and Japan, where the tax-to-GDP ratio is not available in 2019. In both countries, nominaltax revenues grew faster than GDP, leading to increases in the tax-to-GDP ratio.3. As provisional 2019 figures are not available for Australia and Japan, the change in the tax-to-GDP ratio is calculated between 2009 and 2018.4 OECD 2020

TAX-TO-GDP RATIOSFigure 3. Relative changes in nominal tax revenues and nominal GDP, 2018-2019p (% change)%20nominal GDP growth, %Decrease in tax-to-GDP rationominal tax revenue growth, %Increase in tax-to-GDP NZLCHLSWEISLBELTUR-5HUN0Note: Data for Australia and Japan show the change between 2017 and 2018, as preliminary data for 2019 was not available. Data for Mexico in 2019 show a Secretariat estimate, includingexpected revenues collected by state and local governments.Source: Data from Revenue Statistics 2020, http://oe.cd/revenue-statisticsBox 2 Methodology: the tax-to-GDP ratioThe tax-to-GDP ratios shown in Revenue Statistics 2020 express aggregate tax revenues as a percentage of GDP. The value of this ratiodepends on its denominator (GDP) as well as its numerator (tax revenue), and that the denominator – GDP – is subject to historicalrevision.The numerator (tax revenue)llFor the numerator, the OECD Secretariat uses revenue figures that are submitted annually by correspondents from nationalMinistries of Finance, Tax Administrations or National Statistics Offices. Although provisional figures for most countries becomeavailable with a lag of about six months, finalised data become available with a lag of around one and a half years. Final revenuedata for 2018 were received during the period May-August 2020.In thirty-four OECD countries the reporting year coincides with the calendar year. Three countries – Australia, Japan and NewZealand – have different reporting years. Reporting year 2018 includes Q2/2018–Q1/2019 (Japan) and Q3/2018–Q2/2019(Australia, New Zealand) respectively (Q quarter).The denominator (GDP)lFor the denominator, the GDP figures used for Revenue Statistics 2020 are the most recently available in September 2020. By thattime, the 2018 and 2019 GDP figures were available for all OECD countries.l U sing these GDP figures ensures a maximum of consistency and international comparability for the reported tax-to-GDP ratios.l T he GDP figures are based on the OECD Annual National Accounts (ANA – SNA) for the OECD countries where the reporting year isthe actual calendar year.lWhere the reporting year differs from the calendar year, the annual GDP estimates are obtained by aggregating quarterly GDPestimates provided by the OECD Statistics Directorate for those quarters corresponding to each country’s fiscal (tax) year.The average sho