Denmark and Sweden have the highest overall tax rates among advanced countries and Mexico and Turkey the lowest, but the average tax take is running at close to record high levels, the OECD said on Wednesday on data for 2006.
Provisional data for 2007 showed that tax burdens rose in 11 of 26 countries, but fell in 13.
This signalled that the average would probably stay at recent high levels, having declined in 2001-2004, “temporarily reversing a rising trend witnessed since the 1970s,” the data showed.
The Organisation for Economic Cooperation and Development also warned that the economic slowdown, aggravated by the financial crisis, would reduce tax revenues.
The overall amount of tax levied in the 30 OECD countries in 2006, the latest year for which data is available, was 35.9 percent of output, close to the record of 36.1 percent in 2000.
Denmark and Sweden came first, each with a ratio of 49.1 percent.
Provisional figures for 2007 showed tax revenues in Sweden dropping to 48.2 percent of output, while Denmark registered a 48.9 percent rate.
The countries with the lowest rate of overall taxation were Mexico with 20.6 percent and Turkey with 24.5 percent, on standardized data, the OECD said.
Among the other OECD figures, the ratio for the United States was 28.0 percent, Canada 33.3 percent, Japan 27.9 percent, Finland 43.5 percent, Germany 35.6 percent, Ireland 31.9 percent, Poland 33.5 percent, Britain 37.1 percent and France 44.2 percent.
The OECD, the main policy forum for developed industrialised countries, said that ratios of tax to gross domestic product reflected government choices
in fiscal policy “which can play a distributive role and even out
Surveys showed that there was “a high level of contentment among Danish citizens with the nation’s egalitarian society”.
But by contrast “Mexico’s low tax-to-GDP ratio reflects a lack of redistributive policies and hinders the government’s ability to invest in the physical and social infrastructure that is required for a sustainable growth path.”
The organization also provided data showing that revenue from taxes on businesses continued to rise to 3.9 percent of GDP in 2006 from 3.7 percent in 2005 and 3.6 percent in 2000, and 2.2 percent in 1975.
The OECD said it was unclear whether or not this trend would continue, since the current economic slowdown would cut into tax revenues. “The current economic slowdown is going to put additional pressure on government budgets,” the OECD secretary general Angel Gurria said.
Some of the figures for tax on business as a proportion of national output in 2006 were:
United States 3.3 percent, Australia 6.6 percent, Japan 4.7 percent, New Zealand 5.8 percent, Austria 2.2 percent, Denmark 4.3 percent, Finland 3.4 percent, France 3.0 percent, Germany 2.1 percent, Italy 3.4 percent, Norway 12.9 percent, Ireland 3.8 percent, Poland 2.4 percent, Sweden 3.7 percent, Switzerland 3.0 percent, Turkey 1.5 percent and Britain 4.0 percent.