Tax Indicators

8/11/2019 Tax Indicators

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Centre for Tax Policy and Administration

Organisation for Economic Co-operation and Development

Growth-enhancing tax Reform in France:

Applying tax indicators commonly employed in

OECD Tax Surveillance work

Ana Cebreiro


OECD


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2

Higher tax burden (tax-GDP ratio) than OECD average

Source: Revenue Statistics 1965-2006 (OECD)

24

2628

30

32

34

36

38

4042

44

46

48

50

52

54

1975 1985 1990 1995 2000 2004 2005 2006

OECD Total EU 15 United States Japan Germany France Sweden


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3

Share of revenues:

high proportion of SSC and low of PIT and CIT

Source: Revenue Statistics 1965-2006 (OECD)

0%

20%

40%

60%

80%

100%

BEL

CAN

FIN

FRA

GER

IRL

ITA

JPN

NLD

NOR

SPA

SWE

SWI

UK

US

Personal income Corporate income Social security Payroll

Property Goods and services Other


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Highest CIT rate of all European OECD countries

The basic combined central and sub-central (statutory) corporate income tax rate given by

the adjusted central government rate plus the sub-central rate.Source: www.oecd.org/ctp/taxdatabase

0

10

20

30

40

50

JPNUS

FRA

BEL

CAN

LUX

GER

AUS

NZL

SPA

MEX

NOR

SWEUKITA

KOR

PRTFIN

NLD

AUT

DNK

GRCSWI

CZE

HUN

TUR

POL

SVKICLIRL

Top CIT rate 2000 Top CIT rate 2008

OECD average in 2000 and 2008


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5

High CIT rate and Narrow CIT base (2005)

0

5

10

15

20

25

30

35

40

45

US

FRA

SPA

SWE

BEL

JPN

CAN

GER

NLD

UK

FIN

NOR

IRL

Statutory top CIT rate AETR METR

Source: Institute for Fiscal Studies


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6

Low CIT revenues (2005)

Source: Revenue Statistics 1965-2006

0

5

10

15

20

25

30

GER

FRA

ITA

SWE

FIN

BEL

SWI

UK

NLD

CAN

SPA

IRL

US

JPN

NOR

Taxes on corporate income as % of total taxation

OECD average revenues (2005)


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Tax Wedge:

High Employer SSC and relatively low PIT (2007)

Source: Taxing Wages (2007)

0

10

20

30

40

50

60

BEL

HUN

GER

FRA

AUTITA

SWE

NLDFIN

CZE

POL

TUR

GRC

DNK

SPA

SVK

LUX

NOR

PRTUK

CANUS

SWI

JPNICL

AUSIRL

NZL

KOR

MEX

Personal income tax Employee SSC Employer SSC

OECD average tax wedge single taxpayer at

100% of the AW (0 children) in 2007


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0%

10%

20%

30%

40%

50%

60%

70%

0%

10%

20%

30%

40%

50%

60%

70%

50

60

70

80

90

100

110

120

130

140

150

160

170

180

190

200

210

220

230

240

250

employer SSC as % of total labour costs employee SSC as % of total labour costs

average local income tax as % of total labour costs average central income tax as % of total labour costs

family benefits as % of total labour costs average tax wedge (sum of the components)

net personal average tax rate as % of gross wage earnings

Tax Wedge:

High Employer SSC and relatively low PIT (2007)


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Relatively low C-efficiency ratio (2005)

C-efficiency ratio: ratio of the share of VAT revenues to consumption divided by the

standard VAT rate, expressed as percentage.

0

10

20

30

40

50

60

70

80

SWI

JPN

IRL*

NLD

FIN

NOR

SPA

GER

SWE

FRA

UK

BEL*

ITA

Standard VAT rate C-efficiency ratio

OECD average C-efficiency ratio and standard VAT rate in 2005


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Low Use of Environmental related taxes (2004)

0

1

2

3

4

5

6

7

8

9

10

US

CAN

JPN

SPA

FRA

SWI

BEL

IRL

GER

UK

SWE

NOR

ITA

FIN

NLD

environmental taxes as % of GDP

environmental taxes as % of total tax revenue

OECD average of environmental taxes as a % of GDP and as a % of total tax revenue

in 2004


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Overall tax policy recommendations

Proposed tax cuts: the promotion of economic growth requires:

Reduction of the corporate income tax rate

Reduction in social security contributions, particularly those paid by employers

Wealth tax reform

These tax cuts can be financed by: Corporate income tax base broadening

Reforming VAT

Moving to a more uniform VAT system (reduction in the exemptions,

increase/abolish the reduced rates)

Possibly increasing the standard VAT rate

Increased use of environmentally related taxes

Preventing an increase in inequality by:

Reduce the burden of CSG and CRDS on people with low incomes

Increase the progressivity of the personal income tax system at low and moderate

income levels (CSG, CRDS as well as personal income tax)


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Other tax indicators that could have

been included in the analysis

Top tax rate on personal income

Marginal tax wedges (labour income)

Other compulsory payments indicators

Marginal effective tax rates (METRs)

(Top) tax burden on dividends and interest

(Top) tax burden on capital gains

Tax burden on investment in owner-occupied housing

Indicators on R&D tax incentives

Tax indicators that measure the incentives for self-

employed to incorporate, etc.

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Organisation for Economic Co-operation and Development

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Tax Indicators

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