December 5, 2018 / 10:13 AM / 7 days ago

Government tax takes at record high with France in top spot - OECD

PARIS (Reuters) - France overtook Denmark as the most taxed country in 2017 as government tax revenues in developed countries hit a record high, the OECD said, data which may do little to help President Emmanuel Macron placate protesters angered over living costs.

FILE PHOTO: French President Emmanuel Macron takes part in a conference at the UCL university in Louvain-La-Neuve, on the last day of an official state visit in Belgium, November 20, 2018. REUTERS/Yves Herman/Pool/File Photo

The Organisation for Economic Cooperation and Development (OECD) said on Wednesday overall government tax revenue on average reached 34.2 percent of gross domestic product (GDP) last year among 34 developed countries for which the Paris-based body compiled data.

Though up only slightly from 34.0 percent in 2016, the figure was the highest average overall tax take since the international policy forum’s records began in 1965, it said.

In France, tax revenues rose to 46.2 percent of GDP, surpassing Denmark, where the ratio fell to 46.0 percent.

France’s high tax burden is a source of resentment among voters. A public rebellion dubbed the “yellow vest” movement erupted in mid-November in anger at high fuel taxes and the punishing cost of living. The protests have at times turned violent, in particular in Paris.

Macron’s government, which aims to gradually reduce the overall tax burden during his five-year term, on Tuesday suspended further planned increases in fuel taxes for at least six months to try to calm the spiralling crisis.

The OECD said the government tax take rose in 19 member countries last year and fell in 16.

Israel saw the biggest increase - 1.4 percentage points to 32.7 percent of GDP - due to a number of policy changes affecting taxes on income and profit.

The United States saw the second-biggest increase in 2017 - 1.3 percentage points to 27.1 percent of GDP, which the OECD said was partly due to a one-off repatriation of tax on companies’ foreign earnings.

Mexico had the lowest overall tax burden at 16.2 percent, the OECD said.

Reporting by Leigh Thomas; Editing by Richard Lough and Mark Potter

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