Energy prices were the undisputed protagonists of the economic outlook for 2022. With the final blows of the pandemic, they began to rise and eventually took over the debates at national, European and global levels, after abruptly skyrocketing with the Russian invasion of Ukraine . Governments then put up shields to soften the blow of inflation: direct aid to the most vulnerable, mechanisms to reduce the price of supplies and, above all, generous tax breaks, including tax collection across the Organization for Cooperation and Development (OECD). ) recorded its third decline last year since the 2008 financial crisis. Paradoxically, the general rise in prices simultaneously led to record profits in sectors such as energy, increasing corporate tax revenues in more than three-quarters of the countries that were part of the financial crisis association.
Specifically, fiscal pressure – the ratio of taxes to GDP – averaged 34% across the OECD last year, having fallen by about 0.15 percentage points year-on-year, according to the Revenue Statistics 2023 report the organization published this Wednesday. There were only two further declines between 2008 and 2022, namely 2017 (-0.6) and 2019 (-0.1). Spain did not go against the tide. Fiscal pressure was reduced by three-tenths from 37.8% to 37.5% over the same period, still above the bloc average – but lower than the euro zone. In addition, it is one of the countries where the tax-to-GDP ratio has grown the most in the last decade, a classification led by Korea and Greece.
Although the share of taxes in GDP has declined on average across the OECD, the picture is heterogeneous. Fiscal pressure fell in 21 countries, led by Denmark – the country recorded a decline of 5.5 percentage points but remains one of the economies with one of the highest rates, at 41.9%. The largest increases were recorded in Korea (2.2 points, up to 32%) and Norway (1.8 points, up to 44.3%). The OECD economy with the highest tax burden in 2022 is France at 46.1%, while Mexico at the other end is 16.9%.
The report highlights that the collection of special taxes as a percentage of GDP fell overall in 34 of the 36 economies for which data is available – in absolute terms in 21 – particularly due to the impact of public policies aimed at softening the blow of inflation. “In some countries, particularly in Europe, these declines were due to cuts in energy taxes as well as lower demand for energy products,” the report said. “VAT revenues also fell as a share of GDP in 19 countries, partly due to measures to protect consumers from high energy and food prices.”
Spain has also taken measures to mitigate the price increase, such as: B. Tax reductions on energy supplies, the validity of which ends on December 31st and for which it is not yet known whether there will be a full or partial extension, or the reduction in VAT on basic foodstuffs, which lasts at least until next spring. The weight of all this aid is estimated at one point of GDP, and the fact that they remain in place or are withdrawn gains momentum given the reintroduction of fiscal rules next year and the government’s commitment to reduce the deficit to 3% of GDP. in importance.
The report added that the decline in excise tax revenues was partially offset by higher corporate tax revenues thanks to record profits by companies, particularly in the energy and agriculture sectors. In Spain, corporate recoveries exceeded $30 billion last year, approaching highs before the housing bubble burst at the start of the century.
This edition of the statistics also analyzes tax elasticity between 1980 and 2021, i.e. how tax revenues behaved in relation to economic growth. The study concludes that they have generally increased at the same rate as GDP over the analyzed period, with greater sensitivity to the cycle of corporate income and VAT and greater stability of social security contributions and taxes, especially during short-term economic fluctuations.
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