The overall tax-to-GDP ratio in the
EU27 was 39.3% in 2008, the first year of the economic and financial crisis,
compared with 39.7% in 2007. The EU27
tax ratio was 40.6% in 2000, fell to 38.9% in 2004 and then rose until 2007.
The ratio is
more than one third above the levels
recorded in the US and Japan.
The overall tax ratio in the Eurozone (EA16) fell to 39.7% in 2008 compared with
40.4% in 2007. Since 2000, taxes in the Eurozone have followed a similar trend
to the EU27, although at a slightly
In comparison with the rest of the world, the
EU27 tax ratio remains generally high
and more than one third above the levels recorded in the US and Japan. However,
the tax burden varies significantly between Member States, ranging in 2008 from
less than 30% in Romania (28.0%), Latvia (28.9%), Slovakia (29.1%) and Ireland
(29.3%) - - Gross national product (GNP) which excludes the profits of the
dominant multinational sector in Ireland, is about 18% lower than GDP. Tax
as a ratio of GNP would have been 34% -- to almost 50% in Denmark
(48.2%) and Sweden (47.1%).
Between 2000 and 2008, the largest falls in
tax-to-GDP ratios were recorded in
Slovakia (from 34.1% in 2000 to 29.1% in 2008), Sweden (from 51.8% to 47.1%) and
Finland (from 47.2% to 43.1%), and the highest increases in Cyprus (from 30.0%
to 39.2%) and Malta (from 28.2% to
This information comes from the 2010 edition
of the publication Taxation trends in
the European Union issued by Eurostat, the statistical office of the European
Union and the Commission’s Directorate-General for Taxation and Customs Union.
This publication compiles tax indicators in a harmonised framework based on the
European System of Accounts (ESA 95), allowing accurate comparison of the tax
systems and tax policies between EU Member States.
This year's edition of the report introduces
data on cyclically-adjusted total tax revenues. Cyclical adjustment is a
statistical technique that allows an assessment of to what extent the changes in
the tax ratios are due to cyclical factors and to what extent they reflect
permanent developments such as tax hikes or cuts. The cyclically-adjusted data
indicate that the marked pickup in the tax ratio recorded in 2004-2007 was
essentially due to the economic upswing in that period. The report also includes
a full overview of the tax measures taken by Member States to counteract the
effects of the crisis, with a quantification of their budgetary impact.
Highest implicit tax rates on labour in Italy, on consumption
in Denmark and on capital in the United Kingdom
The largest source of tax revenue in the EU27 is labour taxes, representing over 40% of
total tax receipts, followed by consumption taxes at roughly one quarter and
taxes on capital at just over one fifth.
The average implicit tax rate on labour, a
broad measure of the tax burden falling on work income, was almost unchanged in
the EU27 at 34.2% in 2008 compared
with 34.3% in 2007, after having declined from 35.8% in 2000. Among the Member
States, the implicit tax rate on labour ranged in 2008 from 20.2% in Malta,
24.5% in Cyprus and 24.6% in Ireland to 42.8% in Italy, 42.6% in Belgium and
42.4% in Hungary.
The average implicit tax rate on consumption
in the EU27, which had risen between
2001 and 2007, dropped to 21.5% in 2008 from 22.2% in 2007. In 2008, implicit
tax rates on consumption were lowest in Spain (14.1%), Greece (15.1%) and Italy
(16.4%), and highest in Denmark (32.4%), Sweden (28.4%) and Luxembourg (27.1%).
In the EU27, the average implicit tax rate on capital for
the Member States for which data are available was 26.1% in 2008 compared with
26.8% in 2007. The lowest implicit tax rates on capital were recorded in Estonia
(10.7%), Lithuania (12.4%) and Ireland (15.7%), and the highest in the United
Kingdom (45.9%), Denmark (43.1%) and France (38.8%).