In 2005, tax revenue1 (i.e. the total amount of taxes and social contributions) in the EU272 stood at 40.8% of GDP, compared with 40.4% in 2004. In the Eurozone2 (EA13) tax revenue was 41.2% of GDP in 2005, compared to 40.9% in 2004.
Over a longer period, tax revenue as a percentage of GDP in both the EU252 and the Eurozone were in 2005 slightly below the levels recorded in 1995.
These figures come from a publication3 issued by Eurostat, the Statistical Office of the European Union. This report gives additional information on the evolution of tax revenue in the EU and the Member States between 1995 and 2005, and on the breakdown of tax revenue across Member States by main tax category.
Tax revenue ranged from 29% of GDP in Lithuania and Romania to 52% in Sweden
Among the Member States there were substantial differences in the tax-to-GDP ratio. In 2005 Sweden (52.1%) recorded the highest ratio, followed by Denmark (51.2%), Belgium (47.7%), France (45.8%), Finland (44.0%) and Austria (43.6%). The lowest ratios were observed in Romania (28.8%), Lithuania (29.2%), Slovakia (29.5%), Latvia (29.6%), Estonia (31.0%) and Ireland (32.2%).
In 2005, as compared with 2004, tax revenue as a proportion of GDP rose in nineteen Member States, fell in six and remained stable in Germany and Greece. The highest increases in the tax-to-GDP ratio were recorded in Cyprus (from 34.1% in 2004 to 36.2% in 2005), Malta (from 36.2% to 37.7%), Poland (from 32.7% to 34.2%) and Denmark (from 49.9% to 51.2%). The largest reductions were observed in Austria (from 44.4% to 43.6%), the Czech Republic (from 36.8% to 36.3%), Estonia (from 31.5% to 31.0%) and Slovakia (from 30.0% to 29.5%).
Variation in structure of taxation between Member States
At EU27 level, the three main categories of taxes4 contribute roughly equally to total tax revenue: in 2005 taxes on production and imports, such as VAT, import and excise duties, accounted for 34% of the total tax revenue, taxes on income and wealth for 31% and actual social contributions for 32%.
However, the structure of taxation varies considerably between Member States. In 2005, Bulgaria (19.0%), Denmark (17.9%) and Cyprus (17.4%) had the highest ratios of taxes on production and imports to GDP, compared to an EU27 average of 13.8%. On the other hand, Lithuania (11.5%), the Czech Republic (11.9%) and Germany (12.1%) recorded the lowest ratios.
With regard to taxes on income and wealth, Denmark (31.2%), Sweden (20.1%) and Finland (17.5%) recorded the highest ratios to GDP, compared to an EU27 average of 12.8%, while Romania (5.3%), Bulgaria and Slovakia (both 6.1%) registered the lowest ratios.
For actual social contributions, the highest ratios to GDP were observed in Germany (16.7%), France (16.4%) and the Czech Republic (15.1%), compared to an EU27 average of 13.0%, whereas Denmark (1.1%), Ireland (4.8%) and Malta (7.2%) recorded the lowest ratios. Denmark's social security system is, in fact, almost exclusively financed by general taxation.
Ireland
Irish taxes as a percentage of GDP was 32.2% compared with 34.9% in 1995. However, because GDP includes the output of the multinational sector, which is very significant in Ireland (92% of Irish exports were made by foreign-owned firms in 2006), it is more useful to use Gross National Product - the total value of final goods and services produced in a country plus income from Irish capital held abroad set-off against transfers of net earnings of multinationals - in effect net income outflows from Ireland . In other European countries, there is only a marginal difference between GDP and GNP.
| |
1995 |
2005 |
| GDP |
€53,147m |
€161,163m |
| GNP |
€46,994m |
€135,914m |
| Tax as % of GNP |
36.7% |
36.2% |
We can see from the table above that the Irish tax burden has changed little since 1995.
While personal taxes have fallen, indirect or stealth taxes have risen.
In addition, as many Irish taxpayers see a necessity to pay private health insurance because of the perceived poor quality of the public health service, the cost is equivalent to a tax but is not included in the taxation figures.
Family health insurance premiums of say €2,000 net of the tax credit for a family earning €60,000 gross, costs 3.3% of income.
See also:
Tax revenues on the rise in many OECD countries, OECD report shows; Irish tax burden virtually unchanged in period 1995-2005
(OECD figures for Ireland are slightly different from Eurostat figures but not material).
2005 International Tax Competitiveness Report: Taxes in leading economies serious disincentive to capital investment
Total taxes, % of GDP
|
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
|
EU27 |
: |
: |
: |
: |
: |
: |
41.2 |
40.6 |
40.5 |
40.4 |
40.8 |
|
EA13 |
41.4 |
42.2 |
42.6 |
42.4 |
42.9 |
42.6 |
41.7 |
41.2 |
41.2 |
40.9 |
41.2 |
|
EU25 |
41.1 |
41.7 |
41.9 |
41.9 |
42.3 |
42.1 |
41.2 |
40.6 |
40.6 |
40.5 |
40.9 |
|
EA12 |
41.4 |
42.2 |
42.6 |
42.4 |
42.9 |
42.6 |
41.7 |
41.2 |
41.2 |
40.9 |
41.2 |
|
BE |
45.9 |
46.5 |
47.0 |
47.6 |
47.6 |
47.3 |
47.4 |
47.5 |
47.1 |
47.4 |
47.7 |
|
BG |
: |
: |
: |
: |
: |
32.6 |
31.4 |
30.2 |
32.9 |
34.6 |
34.8 |
|
CZ |
36.2 |
34.7 |
35.0 |
33.4 |
34.1 |
33.9 |
34.0 |
34.8 |
35.8 |
36.8 |
36.3 |
|
DK |
49.8 |
50.1 |
49.9 |
50.3 |
50.9 |
50.2 |
49.3 |
48.7 |
48.7 |
49.9 |
51.2 |
|
DE |
41.3 |
42.3 |
42.2 |
42.4 |
43.2 |
43.3 |
41.4 |
41.0 |
41.1 |
40.2 |
40.2 |
|
EE |
37.9 |
35.6 |
35.9 |
34.9 |
34.6 |
31.3 |
30.2 |
31.2 |
31.6 |
31.5 |
31.0 |
|
IE |
34.9 |
35.1 |
34.3 |
33.4 |
33.4 |
32.9 |
31.1 |
29.8 |
30.5 |
31.9 |
32.2 |
|
EL |
34.7 |
35.1 |
36.4 |
38.4 |
39.6 |
40.0 |
38.7 |
38.9 |
37.8 |
36.7 |
36.7 |
|
ES |
33.6 |
34.0 |
34.1 |
33.9 |
34.4 |
34.8 |
34.3 |
34.7 |
34.7 |
35.4 |
36.4 |
|
FR |
44.5 |
45.7 |
45.9 |
45.8 |
46.8 |
45.9 |
45.6 |
44.9 |
44.7 |
45.0 |
45.8 |
|
IT |
41.8 |
42.3 |
44.2 |
42.9 |
42.9 |
42.1 |
41.8 |
41.2 |
41.7 |
41.0 |
40.8 |
|
CY |
26.9 |
26.8 |
26.0 |
28.2 |
28.5 |
30.5 |
31.5 |
31.5 |
33.3 |
34.1 |
36.2 |
|
LV |
33.2 |
30.8 |
32.1 |
33.8 |
32.4 |
29.7 |
28.7 |
28.4 |
28.7 |
28.7 |
29.6 |
|
LT |
28.6 |
27.9 |
31.0 |
32.0 |
31.9 |
30.2 |
28.7 |
28.4 |
28.2 |
28.6 |
29.2 |
|
LU |
38.2 |
38.6 |
40.4 |
40.4 |
39.2 |
40.0 |
40.6 |
40.0 |
39.4 |
38.8 |
39.1 |
|
HU |
41.7 |
40.6 |
39.0 |
39.1 |
39.2 |
38.6 |
39.0 |
38.6 |
38.5 |
38.7 |
38.6 |
|
MT |
31.0 |
26.0 |
28.3 |
26.4 |
28.1 |
29.2 |
31.5 |
33.1 |
33.2 |
36.2 |
37.7 |
|
NL |
41.4 |
41.4 |
40.8 |
40.6 |
41.5 |
40.9 |
39.4 |
38.7 |
38.4 |
38.7 |
39.2 |
|
AT |
43.6 |
44.8 |
46.2 |
46.2 |
45.8 |
44.8 |
46.5 |
45.5 |
44.8 |
44.4 |
43.6 |
|
PL |
32.4 |
37.2 |
36.5 |
35.4 |
35.3 |
34.0 |
33.6 |
34.3 |
33.4 |
32.7 |
34.2 |
|
PT |
32.7 |
33.5 |
33.6 |
33.9 |
34.8 |
35.2 |
34.8 |
35.6 |
36.3 |
35.4 |
36.3 |
|
RO |
: |
: |
: |
: |
: |
: |
27.8 |
28.6 |
28.1 |
27.8 |
28.8 |
|
SI |
40.5 |
39.4 |
38.3 |
39.1 |
39.5 |
38.9 |
39.2 |
39.6 |
39.8 |
39.9 |
40.7 |
|
SK |
39.7 |
38.1 |
35.1 |
35.7 |
34.3 |
33.0 |
31.6 |
32.0 |
31.1 |
30.0 |
29.5 |
|
FI |
46.3 |
47.6 |
46.8 |
46.5 |
46.1 |
47.4 |
44.7 |
44.7 |
44.1 |
43.7 |
44.0 |
|
SE |
49.7 |
52.1 |
52.6 |
53.4 |
54.0 |
54.1 |
52.1 |
50.5 |
51.0 |
51.3 |
52.1 |
|
UK |
36.9 |
36.5 |
37.1 |
38.0 |
38.4 |
38.9 |
38.7 |
37.3 |
37.1 |
37.4 |
38.6 |
|
NO |
42.3 |
42.8 |
42.5 |
42.5 |
42.8 |
43.0 |
43.2 |
43.6 |
42.9 |
44.0 |
45.0 |
Tax revenue by main tax categories, % of GDP
|
Production and imports |
Income and wealth |
Actual social contributions |
|
1995 |
2000 |
2005 |
1995 |
2000 |
2005 |
1995 |
2000 |
2005 |
|
EU27 |
: |
: |
13.8 |
: |
: |
12.8 |
: |
: |
13.0 |
|
EA13 |
13.1 |
13.9 |
13.8 |
11.1 |
12.7 |
11.7 |
15.7 |
14.7 |
14.4 |
|
EU25 |
13.4 |
14.1 |
13.8 |
12.2 |
13.8 |
12.9 |
14.1 |
13.1 |
13.0 |
|
EA12 |
13.1 |
13.9 |
13.7 |
11.1 |
12.7 |
11.7 |
15.7 |
14.7 |
14.4 |
|
BE |
12.9 |
13.8 |
13.9 |
16.3 |
17.1 |
17.1 |
14.4 |
13.9 |
13.9 |
|
BG |
: |
15.1 |
19.0 |
: |
7.0 |
6.1 |
: |
11.0 |
10.5 |
|
CZ |
12.3 |
11.3 |
11.9 |
9.6 |
8.3 |
9.3 |
14.4 |
14.2 |
15.1 |
|
DK |
17.0 |
17.2 |
17.9 |
30.7 |
30.3 |
31.2 |
1.1 |
1.8 |
1.1 |
|
DE |
12.0 |
12.5 |
12.1 |
10.8 |
12.3 |
10.2 |
17.3 |
17.3 |
16.7 |
|
EE |
13.9 |
12.4 |
13.5 |
10.9 |
7.8 |
7.1 |
13.1 |
11.0 |
10.4 |
|
IE |
14.5 |
13.7 |
13.6 |
13.5 |
13.3 |
12.3 |
5.0 |
4.4 |
4.8 |
|
EL |
14.4 |
15.5 |
12.9 |
7.4 |
10.6 |
9.3 |
10.5 |
11.5 |
12.1 |
|
ES |
10.7 |
11.9 |
12.5 |
9.9 |
10.2 |
10.9 |
11.8 |
12.0 |
12.2 |
|
FR |
16.1 |
15.8 |
15.8 |
8.1 |
12.0 |
11.4 |
18.6 |
16.1 |
16.4 |
|
IT |
12.4 |
15.2 |
14.5 |
14.5 |
14.4 |
13.3 |
12.7 |
12.1 |
12.6 |
|
CY |
11.4 |
12.4 |
17.4 |
8.7 |
10.9 |
9.4 |
6.5 |
6.5 |
8.4 |
|
LV |
14.1 |
12.3 |
12.9 |
7.1 |
7.3 |
8.0 |
12.0 |
9.9 |
8.5 |
|
LT |
12.4 |
12.6 |
11.5 |
8.7 |
8.5 |
9.1 |
7.4 |
9.4 |
8.3 |
|
LU |
11.8 |
14.0 |
13.4 |
15.3 |
14.9 |
14.0 |
9.9 |
10.1 |
10.8 |
|
HU |
17.8 |
16.1 |
15.8 |
8.8 |
9.5 |
9.0 |
14.9 |
12.9 |
13.6 |
|
MT |
12.2 |
12.6 |
16.7 |
8.0 |
9.1 |
11.8 |
6.0 |
6.4 |
7.2 |
|
NL |
11.8 |
12.5 |
13.1 |
12.3 |
11.6 |
11.6 |
15.9 |
15.4 |
13.1 |
|
AT |
14.8 |
15.1 |
14.7 |
11.6 |
13.1 |
12.9 |
14.9 |
14.7 |
14.6 |
|
PL |
14.2 |
12.6 |
13.9 |
11.7 |
7.2 |
7.0 |
11.3 |
14.4 |
13.7 |
|
PT |
13.9 |
14.1 |
15.1 |
8.4 |
9.8 |
8.7 |
9.6 |
10.3 |
11.3 |
|
RO |
: |
: |
13.0 |
: |
: |
5.3 |
: |
: |
9.7 |
|
SI |
15.9 |
16.3 |
16.4 |
7.1 |
7.5 |
9.3 |
17.3 |
14.7 |
14.8 |
|
SK |
15.1 |
12.8 |
13.0 |
11.5 |
7.6 |
6.1 |
14.1 |
13.6 |
10.9 |
|
FI |
14.2 |
13.9 |
14.1 |
17.3 |
21.1 |
17.5 |
14.5 |
12.1 |
12.1 |
|
SE |
16.1 |
16.8 |
17.3 |
19.9 |
22.2 |
20.1 |
13.0 |
14.4 |
13.9 |
|
UK |
14.1 |
14.2 |
13.3 |
15.1 |
16.8 |
16.5 |
6.8 |
6.9 |
8.0 |
|
NO |
16.1 |
13.7 |
12.9 |
16.2 |
20.2 |
23.1 |
9.9 |
9.0 |
9.1 |
- Tax revenue of general government is defined as taxes on production and imports, current taxes on income and wealth, capital taxes and compulsory and voluntary actual social contributions and imputed social contributions, The definition differs slightly from the one used in the publication “Structures of the taxation systems in the EU” (see News Release 65/2006, 17 May 2006). The latter excludes the voluntary and imputed social contributions and the difference between the two measures amounts to around one percent of GDP.
- Up to 31 December 2006 the European Union (EU25) included: Belgium (BE), the Czech Republic (CZ), Denmark (DK), Germany (DE), Estonia (EE), Greece (EL), Spain (ES), France (FR), Ireland (IE), Italy (IT), Cyprus (CY), Latvia (LV), Lithuania (LT), Luxembourg (LU), Hungary (HU), Malta (MT), the Netherlands (NL), Austria (AT), Poland (PL), Portugal (PT), Slovenia (SI), Slovakia (SK), Finland (FI), Sweden (SE) and the United Kingdom (UK). From 1 January 2007 the European Union (EU27) also includes Bulgaria (BG) and Romania (RO).
The Eurozone (EA12) consisted of 12 Member States up to 31 December 2006: Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland. From 1 January 2007 the Eurozone (EA13) also includes Slovenia.
- Eurostat, Statistics in Focus, Economy and Finance, 31/2007, "Tax revenue in the EU: Increases for the first time since 1999, to 40.9% of GDP". The publication is available free of charge in PDF format on the Eurostat website.
- The three main categories of taxes comprise:
Taxes on production and imports including value added tax (VAT), import duties, excise and other specific taxes on products and other taxes on production;
Taxes on income and wealth including personal and corporate income taxes; and
Actual social contributions comprising employers’, employees’, self-employed and non-employed actual social contributions.
Capital taxes and imputed social contributions are not included in these main categories.
