Brussels, 16/06/2014 (Agence Europe) - A report published by the European Commission and the EU's statistical office, Eurostat, shows that the tax burden rose in the EU28 in 2012. As a percentage of GDP, tax income in the form of taxes and social security contributions rose for member states to 39.4% of GDP in 2012 from 38.8% in 2011. In the eurozone, the tax burden rose to 40.4% of GDP in 2012 from 39.5% in 2011. The tax burden in the United States in 2011 stood at 24.7%.
In 2012, tax income as a proportion of GDP rose in 22 member states, remained unchanged in Cyprus and fell in six member states (Portugal, Slovakia, the United Kingdom, Lithuania, Sweden and Romania) and the trend is expected to have continued on into 2013. The report says that the upward rise is due to VAT increases and the introduction of new taxes in member states in recent years to deal with their deficits and also due to an improved business climate in most member states. There is a wide gap between member states. For example, tax income in Lithuania stood at 27.2% of GDP in 2012, compared with 48.7% in Denmark.
Denmark has the highest tax burden in the EU, followed by Belgium (45.4% of GDP), France (45%), Sweden (44.2%), Finland (44.1%) and Italy (44%).
The report shows that tax on labour is the main source of tax income for EU28 member states, followed by VAT and capital gains tax and other taxes on capital. The European Commission's recent recommendations to the member states say the tax on labour must be reduced to help boost job creation, said Tax Commissioner Algirdas Semeta, who said that the report published on Monday confirms the Commission's concerns. Tax on labour was the main source of tax income in 2012 for 24 member states, making up more than half of all tax income for 13 of them. Tax on work was highest in Sweden (58.6%), the Netherlands (57.5%), Austria (57.4%) and Germany (56.6%). Only four member states have tax on labour of below 40%, namely Bulgaria (32.9%), Malta (34.6%), Cyprus (37.1%) and the United Kingdom (38.9%).
The tax shift away from labour that the Commission desires will help companies become more competitive and must be introduced, added Semeta.
Tax on consumption were the main source of tax inform in four countries: Bulgaria, Croatia, Malta and Romania. The lowest taxes on consumption are in Belgium (23.7%), France and Italy (both 24.7%).
Tax on capital provides the lowest proportion of tax income in the EU28, only exceeding 25% of tax income in Luxembourg (27.5%), the United Kingdom (27.4%), Malta (26.6%) and Cyprus (26.1%). In Estonia and Slovenia, tax on capital gains provides only 7.1% and 9.8% of tax income respectively. (EL)