Tax Advanced countries near record high tax October 16, 2008 AAP
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 per cent of output, close to the record of 36.1 per cent in 2000.
Denmark and Sweden came first, each with a ratio of 49.1 per cent.
The countries with the lowest rate of overall taxation were Mexico with 20.6 per cent and Turkey with 24.5 per cent, on standardised data, the OECD said.
Among the other OECD figures, the ratio for the United States was 28.0 per cent, Canada 33.3 per cent, Japan 27.9 per cent, Finland 43.5 per cent, Germany 35.6 per cent, Ireland 31.9 per cent, Poland 33.5 per cent, Britain 37.1 per cent and France 44.2 per cent.
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 inequalities."
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 organisation also provided data showing that revenue from taxes on businesses continued to rise to 3.9 per cent of GDP in 2006 from 3.7 per cent in 2005 and 3.6 per cent in 2000, and 2.2 per cent 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 per cent, Australia 6.6 per cent, Japan 4.7 per cent, New Zealand 5.8 per cent, Austria 2.2 per cent, Denmark 4.3 per cent, Finland 3.4 per cent, France 3.0 per cent, Germany 2.1 per cent, Italy 3.4 per cent, Norway 12.9 per cent, Ireland 3.8 per cent, Poland 2.4 per cent, Sweden 3.7 per cent, Switzerland 3.0 per cent, Turkey 1.5 per cent and Britain 4.0 per cent.
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