Tax revenues at all-time high among OECD nations

Tax collected by the advanced economies within the Organisation for Economic Co-operation and Development (OECD) have recorded higher than ever tax revenues, surging beyond last year’s all-time high figures.

Taxes on labour and consumption – namely VAT – continue to become an increasing share of the overall total, according to OECD research.

This year’s edition of the OECD annual Revenue Statistics publication shows that the OECD average tax-to-GDP ratio rose to 34.3 per cent in 2015, marking the highest ratio since figures began in 1965.

Some 25 of the 32 OECD countries to provide preliminary data in 2015 recorded an increase in tax-to-GDP levels, with VAT revenues the largest source of consumption tax revenues in the OECD; reaching an all-time high of 6.8 per cent of GDP.

A combination of personal income taxes, social security contributions and value-added taxes were higher in 2014 than at any other point since 1965, at 24.3 per cent of GDP on average in 2014.

Since the financial crisis, the share of personal income taxes in total tax revenue has continued to rise, while the share of corporate tax revenues has not yet recovered to pre-crisis levels.

Personal income taxes grew to 24 per cent of total revenue in 2014, compared with pre-crisis levels of 23.7 per cent in 2007. Meanwhile the share of corporate taxes to total revenue in 2014 was 8.8 per cent, down on 11.2 per cent in 2007.

Additionally, the share of social security contributions to total revenues grew significantly immediately after the recession to 26.8 per cent in 2009, but has steadily decreased since to 26.2 per cent in 2014.

The OECD nations with the highest tax-to-GDP ratios in 2015 were Denmark (46.6 per cent), France (45.5 per cent) and Belgium (44.8 per cent).

Meanwhile OECD members with the lowest tax-to-GDP ratios were Mexico (17.4 per cent), Chile (20.7 per cent), Ireland (23.6 per cent) and Korea (25.3 per cent).

Date published 2 Dec 2016 | Last updated 2 Dec 2016