Tax levels in Ireland lag OECD average

Ireland’s overall tax burden remains well-behind average in the Organisation for Economic Co-operation and Development but it is rising at a higher rate than other countries in the Paris-based club of advanced economies.

In spite of rising taxation since the crash, data compiled by the OECD shows Ireland’s tax burden as a proportion of the size of the economy remains below its level in 2000 when the “Celtic Tiger” boom was still fanning rapid economic growth.

Corporate profits

New OECD research shows that Ireland receives higher revenues from taxes on personal income, property, goods and services than other member states. At the same time, the research shows Ireland receives a slightly lower proportion of revenue from taxes on corporate profits and a much lower proportion from social security contributions.

“The OECD’s annual Revenue Statistics report found that the tax burden in Ireland increased by 1 percentage point from 27.3 per cent to 28.3 per cent in 2013,” said an OECD note on Ireland.

“The corresponding figure for the OECD average was an increase of 0.4 percentage points from 33.7 per cent to 34.1 per cent. Since the year 2000, the tax burden in Ireland has declined from 30.9 per cent to 28.3 per cent. Over the same period, the OECD average in 2013 was slightly less than in 2000 (34.1 per cent compared with 34.3 per cent).”

Irish taxes on personal income, profits and other gains represent 33 per cent of total revenues, compared with the OECD average of 25 per cent. Taxes on corporate profits represent 8 per cent of total revenues, compared with the 9 per cent OECD average.

Irish social security contributions represent 15 per cent of the total, compared with the 26 per cent OECD average.

"The OECD's biennial Consumption Tax Trends report found that VAT revenues in Ireland accounted for 21.7 per cent of total tax revenue, above the OECD average of 19.5 per cent," the body said.

Taxation rising

Such findings were included in research which points to a recovery in tax burdens and revenue collection in advanced economies in general, to levels not seen since the outbreak of the global crisis more than five years ago.

“Historically, tax-to-GDP ratios rose through the 1990s, to a peak OECD average of 34.3 per cent in 2000,” said the OECD.