OCSE

Taxes sting in Italy, comparison with the rest of Europe

In Italy taxes rise to 42.9% of GDP, high compared to the rest of Europe, but not the worst (depending on your point of view).
The comparison with other countries, presented in an OECD statistical report, shows how our country ranks fifth in terms of taxation on GDP.
Above us are France, Norway and other Northern European countries.
Germany remains strong in the European panorama, stable over time and without evident repercussions after the two years of the pandemic.
Instead, the two years of increases during the Covid-19 pandemic weigh on the pockets of other countries, which clearly dictate the pace of a before and after.
In this context, how is Italy doing? read also Italy passes the test of another rating agency.
Is the "garbage" level really far away? Tax/GDP ratio in Italy: OECD data The OECD examined the last two years of the pandemic, in which there was a decline in the average tax/GDP ratio.
In fact, the OECD study finds that tax revenues over the last 40 years have tended to increase at the same rate as GDP.
Revenue from corporate taxes has been the liveliest in the long run, it says, because it has grown faster than economic growth; on the contrary, revenues from excise duties were the least lively, increasing at a slower pace than GDP.
In Italy, specifically: personal income taxes generate revenue equal to 25.9% of GDP (26.8% in the 2022 report); corporate income taxes generate revenue equal to 4.4% of GDP (from 4.8%); social security contributions are equal to 31.2% of GDP (from 31.8%); the revenue from property taxes is equal to 5.8% of GDP (from 5.7%); VAT is equal to 15.7% of GDP (from 14.1%).
read also Budget Law 2024, approval is a mystery: pension issue, coverage is being sought Comparison between countries with the tax/GDP ratio In the 36 countries surveyed, the OECD found a general decline in tax revenues.
In fact, in 2022 overall tax revenues decreased in 21 of the 36 countries surveyed, while they increased in 14 countries and remained at the same level only in Germany.
In the study we read that the average tax/GDP ratio in the OECD area referring to 2022 (latest available data) was on average 34% (+0.15 points), with the lowest extremes in Mexico overall (16.9% ), of Ireland for Europe (20.9%, up 0.2%) while Turkey – a bridge between the European and Asian economies – at 20.8% is down 2% compared to 2021.
The data relating to the USA show a tax/GDP ratio with the index gaining 1.2%, rising to 26.7%, even if it remains far from European standards, where Great Britain for example settles at 35.3% (+0.9).
In Europe, Italy ranks fifth, with 42.9% taxation on GDP.
The ranking includes: France (46.1%, up 0.9%) Norway with 44.3% (+1.9%) Austria with 43.1% (down 0.2%) Finland with 43% (down 0.2%).
Of note is the performance of Denmark, which reduces the tax/GDP index by 5.5 points (41.4% from 47.9%), and of Sweden which, with 41.3%, loses 1.4 percentage points (42 ,7).
Finally, Germany was stable and strong, with 39.3%.

Author: A.W.M.

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