The average tax burden, expressed as the ratio of taxes paid to gross domestic product, in OECD countries in 2006 has risen again, after a period of decline, and is at the level of the year 2000, when it was historically the highest, according to an OECD analysis published in the annual publication “Revenue Statistics”.
Compared to 2005, last year tax obligations, as a percentage of GDP, increased in 14 out of 26 countries for which data is available, while that share decreased in 11 countries, indicating that the tax burden has likely not changed much in the member countries of the Organization. The average tax burden in 30 countries reached 36.2% of GDP in 2005, the last year for which complete data is available, compared to 35.5% in 2004 and 36.2% in 2000.
Three countries (Italy, Ireland, and Korea) experienced an increase in tax burden of more than 1 percentage point between 2005 and 2006, while Luxembourg, New Zealand, and Slovakia also reduced it by more than 1 percentage point.
The latest data showed a slight increase in the share of revenue from the general consumption tax in the form of value-added tax across all OECD countries, except in the USA and some provinces of Canada, averaging 6.9% of GDP in 2005, compared to 6.8% in 2004 and 6.7% in 2000. Observed over a 40-year period, the data shows that, contrary to some opinions, the focus of the tax burden has not shifted from direct to indirect taxes, as the growth in VAT revenue is accompanied by an even greater reduction in specific consumption taxes, especially excise duties.
