Organisation for Economic Co-operation and Development
OECD Consumption tax trends
Maurice Nettley
OECD Centre for Tax Policy and Administration
16-17 September 2010
Centre for Tax Policy and Administration
Consumption taxes
 General consumption taxes
- Value added taxes (VAT) and its equivalent in several
jurisdictions, the Goods and Services tax (GST)
- Sales taxes
 Taxes on specific goods and services
- Excise taxes levied on specific goods
- Motor vehicle taxes
- Custom duties and other taxes on insurance or financial
operations
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Overview of contents
 Discussion of topical issues relating to consumption taxes
 Reports on consumption tax yields in the OECD area
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- trends in tax to GDP ratios
- trends in share of total tax ratios
Rates and structure of VAT in the OECD area
Some details of structure and tax rates for selected excise
duties in OECD
Taxation of motor vehicles
Topical issues relating to consumption
taxes
Examples in the 2008 and 2010 publications relating
to developments in the cross-border trade area
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The path from the 1998 Ottawa Taxation Framework
Conditions to the draft International VAT/GST guidelines
Need to avoid double taxation or double non-taxation
Draft VAT/GST guidelines released on the OECD
website
- Definition of the place of taxation for business to
business internationally traded services and intangibles
- This is a living document to be expanded in the future
Reports on consumption tax yields (1)
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On average the breakdown of tax revenues in the
OECD area in 2007 was as follows:
- Personal income tax
25%
- Corporate income tax
11%
- Social security contributions
25%
- Payroll taxes
1%
- Property taxes
6%
- General consumption taxes
19%))
30%
- Specific consumption taxes
11%))
- Other taxes
3%
TOTAL
100%
Reports on consumption tax yields ( 2 )
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Trends in share of total taxation - 1965 to 2007
Consumption taxes total
- Fell from 36 to 30%
General consumption taxes - Rose from 12 to 19%
Specific consumption taxes - Fell from 24 to 11%
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Trends in tax to GDP ratios - 1965 to 2007
Consumption taxes total
- Rose from 9.1 to 10.3%
General consumption taxes - Rose from 3.3 to 6.7%
Specific consumption taxes - Fell from 5.8 to 3.5%
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Rates and structure of VAT in the OECD
area (1)
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Evolution of VAT/GST rates in the OECD area over the
past 30 years
Details of the use of lower rates, domestic zero rates
and exemptions for specific goods and services
Details of annual turnover concessions for VAT/GST
registration and collection
Existence of special VAT/GST taxation methods such
as the use of the reverse charge scheme or margin
schemes
Rates and structure of VAT in the OECD
area (2)
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Calculation of the VAT Revenue Ratios in OECD
member countries
The VAT Revenue Ratio equals
(VAT revenue)/
([consumption – VAT revenue] * standard VAT rate)
Defined as the ratio between the actual VAT revenue
collected and the revenue that would be collected if VAT
was applied at the standard rate to all final consumption
Parameters of a selected range of excise
taxes in OECD member countries (1)
Details of tax rates and structure of the tax regimes for
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Taxation of beer, wine and other alcoholic beverages
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Tobacco products – cigarettes, cigars, cigarette rolling
tobacco, pipe tobacco
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Mineral oil products – leaded/unleaded petrol, diesel oil,
heating oil and heavy fuel oil
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Taxation of motor vehicles
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Taxes on sale and registration of motor vehicles
( defined in most cases as a registration tax )
Periodic taxes in connection with the ownership of a
vehicle ( defined in most cases as a circulation tax )
Taxes on fuel
Any other taxes and charges , such as insurance taxes
and road tolls etc
Why is this an important publication?
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A unique source of both information and internationally
comparable data on consumption taxes – unique in
terms of the range of countries covered.
Provides analyses of trends in tax yields.
Monitors the evolution of tax rates and the structure of
consumption taxes.
It is an excellent tool for individual countries to assess
their position relative to other countries on criteria such
as VAT rates, registration thresholds, scope for
exemptions and reduced rates.
The VAT Revenue Ratio enables a view of the different
countries’ capacity to capture the potential tax base.
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Thank you and any questions?