Gov­ern­ment tax at record high with France in top spot

Daily Sabah (Turkey) - - Business -

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.

The Or­ga­ni­za­tion 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 in- ter­na­tional 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 on Wed­nes­day scrapped fur­ther planned in­creases in fuel tax amid fear of new vi­o­lence.

Macron de­cided to “get rid” of the tax planned for next year, an of­fi­cial in the pres­i­dent’s of­fice told The As­so­ci­ated Press. Prime Minister Edouard Philippe told law­mak­ers the tax is no longer in­cluded in the 2019 bud­get.

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 sec­ond­biggest 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.

Mean­while, Fi­nance Minister Bruno Le Maire yesterday said France will tax dig­i­tal gi­ants at a na­tional level from 2019 if Euro­pean Union states can­not reach an agree­ment on a tax on dig­i­tal rev­enues for the bloc.

EU fi­nance min­is­ters failed to agree a tax on dig­i­tal rev­enues on Tues­day, de­spite a last minute Franco-Ger­man plan to sal­vage the pro­posal by nar­row­ing its fo­cus to com­pa­nies like Google and Face­book.

“I am giv­ing my­self un­til March to reach a deal on a Euro­pean tax on dig­i­tal gi­ants,” Le Maire told France 2 tele­vi­sion.

“If it doesn’t work out, we will do it at a na­tional level, from 2019,” he added.

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