The OECD countries have reported higher revenue generation from Personal Income Taxes (PIT) as a percent of total revenue collections this year this is even as collections from Value Added Tax (VAT), social security collections on goods and services and consumption tax receipts dipped marginally when compared with preceding years.
According to a new report on the various countries’ tax revenue yields sourced by BRTnews.ng from Tax-news.com website, the OECD’s Revenue Statistics 2017 indicated “that the average share of personal income tax as a percentage of total revenue increased slightly from 2014 to 2015, from 24.1 percent to 24.4 percent.”
Similarly, the data further showed that revenues from corporate income taxes (CIT) were yet to recover from the financial crisis, dropping from 11.2 percent of total revenues in 2007 to a low of 8.8 percent in 2010, and maintaining a similar trend with collections from the source standing at 8.9 percent in 2015.
Nevertheless, the report reflected that the average OECD tax burden continues to grow, with the average tax-to-GDP ratio increasing from 34 percent in 2014 to 34.4 percent in 2015. Of the 33 countries that provided preliminary data from 2016, higher tax-to-GDP ratios were seen in 20, and lower ratios observed in 13.
Last year, the largest increases in tax-to-GDP ratios were recorded in Greece and in the Netherlands at 2.2 percent and 1.5 percent increases respectively while the largest decreases were reported in Austria and New Zealand at one percent each.
“The highest tax-to-GDP ratios last year were recorded in Denmark (45.9 percent), France (45.3 percent), and Belgium (44.2 percent) and the lowest in Mexico (17.2 percent), Chile (20.4 percent), and Ireland (23 percent). All but five countries (Canada, Estonia, Ireland, Luxembourg and Norway) have increased their tax-to-GDP ratio since 2009, the post-financial crisis low-point for tax revenues in the OECD. The pre-crisis high point has been reached or exceeded in 18 countries”.
The report further stated that on average, the OECD tax-to-GDP ratio remained higher than at any point since 1965, including prior peaks in 2000 and in 2007.
According to the report, in 2015, the share of sub-national tax revenues remained relatively stable relative to 2014 in both federal and unitary countries.
Specifically, it was reported that in federal countries, an average of 24.6 percent of revenues was attributed to sub-national governments, with approximately one-third attributed to local governments and the remainder to state governments.
However, in unitary countries, an average of 11.8 percent of revenues was attributed to local governments with government-owned social security funds accounting for 21.1 percent and 24.4 percent in federal and unitary countries, respectively.