European citizens are taxed much more than citizens of USA or Japan, so it is no wonder that in 2012, the overall tax ratio, i.e. the sum of taxes and compulsory actual social contributions in the 28 Member States (EU-28) amounted to 39.4 % in the GDP-weighted average, nearly 15 percentage points of GDP over the level recorded for the USA and around 10 percentage points above the level recorded by Japan.
The latest Eurostat report on taxation trends, released today in Brussels, is based on data for the year 2012, so it doesn't take into account the latest developments in countries like Greece, Spain, or Croatia, who at the time was not even an EU member.
The tax burden varies significantly between Member States, ranging in 2012 from less than 30% of GDP in Lithuania (27.2%), Bulgaria and Latvia (both 27.9%), Romania and Slovakia (both 28.3%) and Ireland (28.7%), to more than 40% of GDP in Denmark (48.1%), Belgium (45.4%), France (45.0%), Sweden (44.2%), Finland (44.1%), Italy (44.0%) and Austria (43.1%).
Between 2011 and 2012, increases in tax-to-GDP ratios of more than 1 percentage point were recorded in Hungary (from 37.3% to 39.2%), Italy (from 42.4% to 44.0%), Greece (from 32.4% to 33.7%), France (from 43.7% to 45.0%), Belgium (from 44.2% to 45.4%) and Luxembourg (from 38.2% to 39.3%), while the largest falls in the ratio were registered in Portugal (from 33.2% to 32.4%), the United Kingdom (from 35.8% to 35.4%) and Slovakia (from 28.6 % to 28.3%).
The largest source of tax revenue in the EU28 is labour taxes, representing more than half of total tax receipts in 2012 (51.0%), followed by consumption taxes (28.5%) and taxes on capital (20.8%).
Labour taxes were the largest source of tax revenue in 2012 in twenty four Member States, and in thirteen Member States they accounted for more than half of total tax revenue. The highest shares of taxation from labour were observed in Sweden (58.6%), the Netherlands (57.5%), Austria (57.4%) and Germany (56.6%). Only in Bulgaria (32.9%), Malta (34.6%), Cyprus (37.1%) and the United Kingdom (38.9%) was the share below 40%.
Consumption taxes were the largest source of tax revenue in 2012 in four Member States: Bulgaria, Croatia, Malta and Romania. The highest shares of taxation from consumption were recorded in Bulgaria (53.3%), Croatia (49.1%) and Romania (45.1%), and the lowest in Belgium (23.7%), France and Italy (both 24.7%).
As for inflation, a parallel report confirms that it was down to 0.6% (0.5% in the Euro area), down from 0.7% in April and much lower than 1.6% in May last year.
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