VT Green Tax Shift & Common Asset Fund Dec. 7, 2004 UVM Green Tax course
TAX POLICY REFORMS 2018 · Green tax measures have continued to focus predominantly on energy…...
Transcript of TAX POLICY REFORMS 2018 · Green tax measures have continued to focus predominantly on energy…...
TAX POLICY REFORMS 2018 OECD AND SELECTED PARTNER ECONOMIES
Summary of key findings
• Country coverage: 35 OECD countries + Argentina, Indonesia and South Africa
• Objective: Identify major tax reforms and tax policy trends across countries
Tax Policy Reforms series: 2018 edition
2
Global economic growth has picked up
0
1
2
3
4
5
6
7
8
0
1
2
3
4
5
6
7
8
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42011 2012 2013 2014 2015 2016 2017
World OECD¹ non-OECD
Source: OECD Economic Outlook 103 database
Real GDP growthYear-on-year percentage changes
3
Tax revenues have reached a new record level
24.8
34.3
0
5
10
15
20
25
30
35
40
45
50
55
1965 1975 1985 1995 2005 2015
Range Average
Long-term evolution of the OECD average tax-to-GDP ratio (1965 – 2016)
% of GDP
Source: OECD Global Revenue Statistics Database4
Summary of key tax trends in 2018
Small cuts in personal income taxes for low and middle income earners
Continued corporate tax rate cuts, led by countries with high tax ratesProgress on BEPS implementation
Stabilisation of VAT ratesBut more VAT revenues expected from administrative and anti-fraud measures
Increased/new excise taxes on harmful consumption (e.g. taxes on sugary drinks)
Environmentally related tax reforms focused on energy and vehicles but insufficient
A few significant property tax changes
5
The slow decline in the tax burden on labour income is likely to continue
Evolution of the OECD average tax wedge on labour income for the average worker between 2000 and 2017
Continued but small personal income tax cuts
targeted at low and middle income earners
% of labour costs
Source: OECD Taxing Wages Database6
Average tax wedge as a percentage of labour costs for workers earning the average wage in 2017
But tax wedges will remain high in many countries
% of labour costs
Source: OECD Taxing Wages Database7
Continuing corporate income tax rate reductions…
32.5
25.723.9
15
20
25
30
35
40
45
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
OECD average G7 average OECD non-G7 average
Evolution of the average combined CIT rates in the OECD, OECD G7 and non-G7 countries between 2000 and 2018
%
Source: OECD Tax Database and Annual Tax Policy Reform Questionnaire8
…led by countries with traditionally high CIT rates
0
10
20
30
40
50
60
2018 2000 2017
Top combined statutory CIT rates in 2000, 2017 and 2018
%
Source: OECD Tax Database and Annual Tax Policy Reform Questionnaire9
• Tax base changes
– Expanded depreciation allowances
– Very limited changes to R&D and innovation-related tax incentives
• BEPS and anti-avoidance measures
– Numerous BEPS and anti-avoidance measures
– but efforts have varied across countries
• Digital economy
– No global consensus, but countries have agreed to work towards a long-term solution by 2020
Efforts to fight against international tax avoidance have continued
10
Standard VAT rates appear to have plateaued
Long-term evolution of the OECD average standard VAT rate (1970 – 2018)
%
Source: OECD Tax Database and Annual Tax Policy Reform Questionnaire 11
More VAT revenues expected from administrative and anti-fraud measures
• Increasing reporting obligations for taxpayers – Data sharing obligations, incl. accounting data– Transmission of invoicing information (incl. real time)– Implementation of advanced risk-based compliance strategies
• Testing alternative VAT collection mechanisms– Domestic reverse-charge regime– Split-payment mechanisms
• Enlisting digital platforms in the collection of VAT on online sales
12
Green tax measures have continued to focus predominantly on energy…
Taxes on energy use
• Most frequent type of green tax reform
• Some efforts to align tax rates more closely with the carbon content of fuels, including outside of road transport
• But reforms remain insufficient
Vehicle taxes
• Increasingly used to encourage the purchase and use of cleaner vehicles
• But experience has shown that, even if they are effective, they can be a costly emissions reduction policy
Other green taxes
• Very few other environmentally related tax reforms (e.g. taxes on waste, plastic bags, chemicals)
13
…but remain insufficient to address environmental challenges
Proportion of carbon emissions subject to different levels of effective tax rates in 2012 and 2015
Note: All tax rates are expressed in 2012 prices. Carbon emissions from biomass emissions are included.Source: OECD Taxing Energy Use 2018
14
Despite a few recent reforms, property taxes still play a relatively limited role
Property tax revenues as a share of GDP in 2000 and 2016
Note: 2015 data used for Australia, Greece, Indonesia, Mexico and South AfricaSource: OECD Global Revenue Statistics Database
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Taxes on financial and capital transactions Estate, inheritance and gift taxes Recurrent taxes on net wealthRecurrent taxes on immovable property Other Total property tax revenues in 2000
% of GDP
15
• Avoid excessively pro-cyclical tax policy in a context of economic recovery
• Critical need to continue cooperating to avoid harmful tax competition
• Continued focus on inclusiveness
• Significant progress needed on environmentally-related taxation
Going forward
16
Contact details
David BradburyHead of the Tax Policy and Statistics [email protected] / tel: +33 1 45 24 15 97
Sarah PerretEconomist, Tax Policy and Statistics [email protected] / tel: +33 1 45 24 79 72
17