Categories
Uncategorized

Reliance on Consumption Taxes in Europe

Today’s map highlights the extent to which European OECD countries rely on consumption tax revenue.

Consumption taxes are on goods and services. All European countries levy consumption taxes in the form of Value-added Taxes (VAT), excise taxes, and other taxes on goods and services. In 2019 (most recent data available), consumption taxes were the largest source of tax revenue in European OECD countries, at an average of 32.4 percent of total tax revenue.

Consumption taxes in Europe, reliance on consumption taxes in Europe, reliance on consumption tax revenue in Europe, taxes on goods and services in Europe

In 2019, Hungary relied the most on consumption tax revenue, at 45.3 percent of total tax revenue. Latvia had the second highest reliance on consumption taxes, at 45.1 percent, followed by Estonia at 42.4 percent.

Switzerland relied the least on consumption taxes in 2019, at 21.0 percent of total tax revenue. Luxembourg and Poland followed, at 23.9 percent and 24.1 percent, respectively.

As the following table shows, VAT revenue accounted on average for approximately two-thirds of all consumption tax revenue collected in 2019. Excise taxes and other taxes on goods and services accounted for the remaining third.

Consumption Taxes Split into VAT and Excise Taxes and Other Taxes on Goods and Services, 2019
  Total Consumption Taxes (% of Total Tax Revenue) VAT (% of Total Tax Revenue) Excise Taxes and Other Taxes on Goods and Services (% of Total Tax Revenue)
Austria (AT) 27.5% 18.0% 9.5%
Belgium (BE) 25.7% 15.6% 10.1%
Czech Republic (CZ) 32.0% 21.7% 10.3%
Denmark (DK) 30.5% 20.3% 10.2%
Estonia (EE) 42.4% 26.7% 15.7%
Finland (FI) 33.7% 21.7% 12.0%
France (FR) 27.1% 15.9% 11.2%
Germany (DE) 26.7% 18.3% 8.4%
Greece (GR) 39.6% 21.3% 18.3%
Hungary (HU) 45.3% 27.1% 18.3%
Iceland (IS) 32.7% 23.6% 9.2%
Ireland (IE) 30.6% 19.4% 11.2%
Italy (IT) 28.4% 14.7% 13.7%
Latvia (LV) 45.1% 27.7% 17.4%
Lithuania (LT) 38.4% 26.2% 12.2%
Luxembourg (LU) 23.9% 15.5% 8.3%
Netherlands (NL) 30.7% 18.2% 12.4%
Norway (NO) 29.5% 21.7% 7.9%
Poland (PL) 24.1% 22.6% 1.4%
Portugal (PT) 40.1% 25.4% 14.6%
Slovak Republic (SK) 35.1% 20.9% 14.3%
Slovenia (SI) 36.3% 21.5% 14.8%
Spain (ES) 28.9% 18.8% 10.1%
Sweden (SE) 28.3% 21.3% 6.9%
Switzerland (CH) 21.0% 11.8% 9.2%
Turkey (TR) 39.0% 18.1% 20.9%
United Kingdom (GB) 32.6% 21.2% 11.4%
Average 32.4% 20.6% 11.8%

Note: Individual items may not sum to total due to rounding.

*For Greece, only the aggregate Taxes on Goods and Services was available for the year 2019. The share of VAT and Excise Taxes and Other Taxes on Goods and Services was calculated using 2018 data.

Source: OECD, “Revenue Statistics – OECD Member Countries: Comparative Tables: 5000 Taxes on goods and services,” https://stats.oecd.org/Index.aspx?DataSetCode=REV.

In 2019, reliance on VAT was highest in Latvia (27.7 percent), Hungary (27.1 percent), and Estonia (26.7 percent).

Switzerland relied the least on VAT revenue, at 11.8 percent of total tax revenue. This is partially because Switzerland has the lowest VAT rate of all countries covered, at only 7.7 percent. Italy (14.7 percent) and Luxembourg (15.5 percent) followed.

Note: This is part of a map series in which we examine tax revenue sources in Europe.

Was this page helpful to you?

Thank You!

The Tax Foundation works hard to provide insightful tax policy analysis. Our work depends on support from members of the public like you. Would you consider contributing to our work?

Contribute to the Tax Foundation


Source