Tax Revenues Grow in OECD

December 18, 2013 International Tax Cooperation

PARIS – Government revenues across the world are showing signs of a steady recovery following the economic shocks in 2008 and 2007, although the current tax take is still below the levels seen before the financial crisis.

Over the course of 2012 the tax-to-GDP ratios in OECD countries rose by 0.5 percent compared to the previous year, reaching an average of 34.6 percent, according to data contained in a new report released December 17th by the Organization for Economic Cooperation and Development.

In the report the experts of the OECD stated that the indicated increase has been mainly attributed to the combined effects of increasing tax rates in Europe, and to a noticeable rise in the collection of individual income taxes, which, in turn, are caused by growing economic activity in Europe and a significant boost in payments of salaries and wages.

However, the report also stated that prior to 2007 the overall average ratio was indicated to be 37 percent, approximately 2.4 percent higher than currently calculated.

The most significant increases in the tax-to-GDP ratio over 2012 were seen in Hungary, Greece, and New Zealand, with growth of 1.8 percent, 1.6 percent, and 1.4 percent, respectively, while the largest declines were in Israel, dropping by 1 percent, and in Portugal and the UK, both falling by 0.5 percent.

The findings were compiled using the currently available data on the tax revenue collections in 30 OECD countries for the period up to the end of the 2012 year, but, according to the experts of the OECD, the demonstrate growth can be to continue throughout the 2013 year, although the exact rate cannot yet be calculated.

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