Brussels, 26/06/2007 (Agence Europe) - Eurostat, the European Statistics Office of the European Communities and Commission services in charge of taxation, have published their annual report on taxation trends in the EU and Norway. This year the analysis focused on 1995-2005 and included Bulgaria and Romania for the first time. It presents a more detailed analysis of consumption (breakdown on consumption taxes according to their components: value added tax, energy, excise on alcohol and tobacco etc). Environmental tax revenues continue their downward trend at a time when reflection about whether to set up this kind of tax is at the heart of the fiscal debate at both national and European levels. These revenues are now at their lowest levels in ten years. The rate stood at 2.6% in 2005 compared to 2.8% in 1995. This decrease is due to a lower energy tax level, given that revenue from other environmental taxes remained stable.
The report indicates that in 2005, the overall tax ratio (i.e. the total amount of taxes and social security contributions) in the EU27 stood at 39.6% of GDP, up from 39.2% in 2004 and nearly the same as in 1995 (39.7%); nevertheless, the overall tax ratio in the Euro area (EA13) was 39.9%. Since 1995 taxes in the Euro area have followed a similar trend to the EU27. The tax burden varies significantly between member states, ranging in 2005 from less than 30% in Romania (28.0%), Lithuania (28.9%), Slovakia (29.3%) and Latvia (29.4%) to more than 50% in Sweden (51.3%) and Denmark (50.3%). The largest falls were recorded in Slovakia, where the overall tax burden dropped from 39.6% in 1995 to 29.3% in 2005. The highest increases were observed in Cyprus (from 26.7% to 35.6%) over the same period. The tax burden on labour was broadly stable at a high level, despite broad political consensus on how to reduce labour taxes. For the EU27 as a whole, the average implicit tax rate (ITR) on labour (including social contributions), amounted to 35.2% in 2005. Among the member states, in 2005 this rate ranged from 22.1% in Malta, 24.6% in Cyprus, 25.5% in the United Kingdom and 25.6% in Ireland to 46.4% in Sweden. Consumption was most taxed in Denmark (33.7%), Sweden (28.1%) and Finland (27.6%), while the lowest implicit rates were registered in Spain (16.3%), Lithuania (16.5%) and Italy (16.9%). The average implicit tax rate on capital in the EU27 stood at 27.3% in 2005. There is considerable disparity in this ratio: tax rates on capital recorded in Denmark standing at (46.5%), Ireland (41.4%) and the lowest in Estonia (8.1%) and Latvia (7.8%). (mb)