Proceedings of 4th European Business Research Conference

Proceedings of 4th European Business Research Conference
9 - 10 April 2015, Imperial College, London, UK, ISBN: 978-1-922069-72-6
Tax Convergence Tendencies in the European Union - A Thiel
Index Based Approach
Țibulcă Ioana Laura
Tax competition between the European Union Member States is one of the major issues that EU
policy makers have to address. Consequently, fiscal convergence within the EU is among its main
long term objectives. While some steps have been taken towards reaching this goal, there are still
problems and concerns regarding this issue. This study proposes an analysis of tax convergence
tendencies in the European Union, in order to see how effective previous convergence measures
have been and how the enlargement of the European Union has affected fiscal convergence
among the Member States.
The database includes annual information regarding all the 28 current EU Member States. The tax
system in each Member State is represented using the overall tax burden, which is calculated as
percentage of overall tax revenue in the GDP. The analyzed time period is 1965-2013 and the
research method is sigma-convergence calculated based on the Theil index. The research results
are consistent to those obtained in previous research based on the coefficient of variation and the
Gini index.
The research was conducted for two different samples. The first sample contained information
regarding all the EU Member States. The results point to a few tax convergence periods, but the
overall conclusion, for the entire time period, is that of lack of tax convergence tendencies. The
second sample contained information regarding 4 different geographical areas within the
European Union: West EU (France, Germany, Ireland, the United Kingdom, and Austria), North
EU (Belgium, the Netherlands, Luxembourg, Denmark, Sweden, and Finland), South EU (Italy,
Greece, Cyprus, Portugal, Spain, and Malta) and East EU (Hungary, Poland, Slovakia, Latvia,
Lithuania, Estonia, Slovenia, the Czech Republic, Bulgaria, Romania, and Croatia). In this case,
the results were not consistent, varying form one region to the other.
Track: Economics, Public Taxation
Țibulcă Ioana Laura, PhD., Bucharest University of Economic Studies, Department of Finance, 7 Mihail
Moxa Street, Romania, tel: 004 021 319 19 00, e-mail: