Significant fall in tax levels in OECD countries - the tax-to-GDP ratio in Belgium decreased by 0.1 percentage point from 42.5% in 2021 to 42.4% in 2022.

Temps de lecture: 3 min |December 7, 2023 à 8:00 AM

High energy prices triggered by Russia’s war of aggression against Ukraine prompted governments to reduce excise taxes during 2022, leading to lower tax levels in many countries, according to new OECD analysis.

Revenue Statistics 2023 shows that the average tax-to-GDP ratio in the OECD fell by 0.15 percentage points (p.p.) in 2022, to 34.0%. This was only the third such decline since the Global Financial Crisis in 2008-09: the level fell by 0.6 p.p. in 2017 and by 0.1 p.p. in 2019.

OCDE (2023), Revenue Statistics 2023 : Tax Revenue Buoyancy in OECD Countries, Éditions OCDE, Paris, https://doi.org/10.1787/9d0453d5-en.

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Revenues from excise taxes fell as a share of GDP in 2022 in 34 of the 36 countries for which preliminary data is available, declining in absolute terms in 21 of these. In some countries, notably in Europe, these declines were related to reductions in energy taxes as well as lower demand for energy products. Revenues from value-added tax (VAT) also declined as a share of GDP in 19 countries, in part due to policies to cushion consumers against high prices for energy and food.

The decline in revenues from excise taxes in 2022 was partly offset by increases in revenues from corporate income taxes (CIT), which rose as a share of GDP in more than three-quarters of OECD countries amid higher corporate profits, especially in the energy and agricultural sectors. CIT revenues in Norway rose by 8.8% of GDP due to exceptional profits in the energy sector.

Overall tax revenues declined as a share of GDP in 21 of the 36 countries in 2022, increased in 14 countries and remained at the same level in one. The largest decline was observed in Denmark (-5.5 p.p., to 41.9%) while the largest increases were seen in Korea (2.2 p.p., to 32.0%) and Norway (1.8 p.p., to 44.3%).

The decline in the OECD’s average tax-to-GDP ratio followed two years of increases during the COVID-19 pandemic, of 0.15 p.p. in 2020 and 0.6 p.p. in 2021. Tax-to-GDP ratios in 2022 ranged from 16.9% in Mexico to 46.1% in France.

A special feature in the new report examines the extent to which tax revenues in OECD countries have kept pace with economic growth in recent decades by analysing tax buoyancy for different tax types for the period from 1980 to 2021. The study finds that tax revenues typically increased at the same rate as GDP over this period; revenues from CIT were the most buoyant over the long run – increasing faster than economic growth – while revenues from excise taxes were the least buoyant, increasing at a slower rate than GDP.

To access the Revenue Statistics report, data, overview and country notes, go to https://oe.cd/revenue-statistics.

COUNTRY SUMMARIES

More about Belgium

The OECD’s annual Revenue Statistics report found that the tax-to-GDP ratio in Belgium decreased by 0.1 percentage point from 42.5% in 2021 to 42.4% in 2022. Between 2021 and 2022, the OECD average decreased from 34.2% to 34.0%. The tax-to-GDP ratio in Belgium has decreased from 43.8% in 2000 to 42.4% in 2022. Over the same period, the OECD average in 2022 was above that in 2000 (34.0% compared with 32.9%). During that period, the highest tax-to-GDP ratio in Belgium was 45.0% in 2013, with the lowest being 42.3% in 2020.