Growth fuelling tax burden in developed countries: OECD
11 Oct 2006
According to the Organisation for Economic Development (OECD), tax burdens are rising in most Western nations with rising economic growth fuelling tax revenues. Higher growth has led to higher corporate and personal taxes, in its latest Annual Revenues Statistics Report.
The OECD says tax revenues, as a percentage of gross domestic product (GDP), had increased during 2005 in 17 of the 24 developed countries that form the OECD. Of the remaining seven, five countries saw their tax burden fall in 2005, led by Hungary, whose tax revenues as a proportion of GDP fell one percentage point to 37.1 per cent.
Iceland had the biggest rise, up 3.7 points to 42 per cent, followed by the US, up 1.3 points to 27, and the UK, up 1.2 to 37 per cent. The report also said that tax revenues across the 24 countries had been boosted by improvements in tax enforcement.
With income tax rates staying level in all three nations, the OECD put the rises down to stronger economic growth.
"Stronger
growth increases both the profitability of companies
and the level of personal incomes, leading to an increase
in the level of taxes they pay," said the report.
