TaxAdministrationUK taxes inching up, but still low for EU

UK taxes inching up, but still low for EU

British taxation inched up from 2002 to 2003, but according to the latest comparative European Union-wide figures, the UK still has one of the lowest European tax burdens.

Link: IMF study of economy prompts mixed reactions

As a proportion of GDP, Britain’s total taxes were 37.1% in 2003, compared with 37% in 2002, up from 36.7% in 1995, before the accession to power of the Labour government.

That said, UK taxation is well below that of France (45.7% of GDP in 2003) and Germany (41.7%). British taxation was also below the average level for the expanded EU, which was 41.5% of GDP, compared with 41.3% in 2002.

Among the old pre-expansion EU, only Spain (36.5%) and Ireland (31.2%) had a lower taxation level than the UK in 2003.

However, tax rates in the new member countries were often lower, with the Czech Republic (36.2%), Cyprus (34.3%), Estonia (33.4%), Latvia (29.1%), Lithuania (28.7%), Malta (34.2%), Poland (35.8%) and Slovakia (30.9%) paying less tax than in Britain.

In 2003, Sweden (51.4%) recorded the highest tax-to-GDP ratio, followed by Denmark (49.8%). The lowest ratios were observed in Lithuania and Latvia.

The highest 2002-3 increases in the tax-to-GDP ratio were recorded in Cyprus (from 32.5% to 34.3%) and the largest reductions in Slovakia (32.5% to 30.9%).

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