[ad_1]
The OECD says it is an outlier, as do Greece and Hungary. On the opposite side are the United States, Switzerland and Ireland.
Portugal is among the countries where the tax burden is too high considering the national gross domestic product (GDP) per capita. The conclusion is from the Organization for Economic Development Cooperation (OECD) in the annual report on fiscal policy.
It is one of the cases that is outside the rule that countries with low levels of GDP per capita also tend to have low tax rates on products. This does not happen in half a dozen countries. The Paris-based organization recalls the “positive correlation between the two indicators”, that is, when one is low, the tax burden, measured in terms of income versus GDP, also falls.
“Countries with lower levels of GDP per capita tend to have a lower tax-to-GDP ratio (for example, Argentina, Chile, Indonesia, Mexico, South Africa and Turkey), while those with high GDP per capita tend to have higher tax revenues as a proportion of GDP, “says the organization, but there are atypical cases that deviate from this hypothesis.
Among these “are the United States, Switzerland and Ireland, all with per capita GDP levels well above the average, but below the average tax burden.” On the contrary, there are countries with levels below the average GDP per capita, but with relatively high tax revenues. And it is in this lot where Portugal enters, along with some countries in central and southern Europe, such as Greece and Hungary.
The value of GDP per capita is expressed in dollars and in purchasing power parity, so that it is comparable with other countries. In the Portuguese case, the amount calculated by the OECD for 2018 was 34,200 dollars, about 27,700 euros. The general average was 36,500 thousand euros.
According to the report “Fiscal Policy Reforms 2020”, tax revenues are also closely linked to state spending.
PAY 81% OF THE EXPENSE
“There is a close link between the levels of public spending in countries and their tax revenues as a percentage of GDP,” the OECD begins by explaining. “Luxembourg, the Netherlands and Korea are the countries with the smallest relative difference between public spending and fiscal revenue, charging taxes for an amount of 95.5%, 92.2% and 90.2% of total spending, respectively,” says the report.
“The largest gap was seen in the US, where tax revenue amounts to less than two-thirds (64.1%) of total public spending, followed by Israel (77.1%) and Hungary (78.3 %) In Portugal, tax revenues represent around 81% of expenses.
[ad_2]
