Presentation is loading. Please wait.

Presentation is loading. Please wait.

Tax Reform: An International Perspective

Published byBrett Hunter Modified over 7 years ago

Similar presentations

Presentation on theme: "Tax Reform: An International Perspective"— Presentation transcript:

1 Tax Reform: An International Perspective
OECD-IEF seminar on Tax Reform Trends Madrid May, 16, 2005 By Jeffrey Owens Organisation for Economic Cooperation and Development

2 OECD Member Countries OECD Member countries
Countries which engage in Tax Dialogue

3 Outline Introductory Comments Overview of OECD Tax Systems Recent Tax Reform Initiatives Alternatives of taxing income Concluding Comments

4 Tax Revenue as % GDP (2003) Mexico United States Korea Japan *
10 20 30 40 50 Mexico United States Korea Japan * Switzerland Ireland Australia * Poland * Turkey Slovak Republic * Canada Portugal * New Zealand United Kingdom Spain Greece * Germany Hungary * Netherlands Czech Republic Iceland Luxembourg Austria Italy Norway France Finland Belgium Denmark Sweden OECD AVG 36.5 EU-15 AVG 40.6 Note: countries have been ranked by their total tax to GDP ratios. *) 2002 figures

5 Change in tax as % of GDP 1975 to 2003 18 16 14 12 10 8 6 4 2 -2 -4 -6
Hungary (*) Czech Republic Netherlands Slovak Republic (*) Poland (*) United States United Kingdom Germany Ireland Canada Switzerland Mexico Luxembourg Norway Japan (*) Australia (*) Belgium Austria New Zealand Finland France Sweden Denmark Iceland Korea Portugal (*) Greece (*) Turkey Spain Italy -8 -6 -4 -2 2 4 6 8 10 12 14 16 18 1975 to 2003 Tax as % GDP

6 Source of tax revenue, 2003 *) 2002 figures Canada France Ireland
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Canada France Ireland Japan (*) Mexico Poland (*) Slovak Rep. (*) Spain United Kingdom United States OECD EU-15 Personal income Corporate income Social security contributions & payroll General consumption Other *) 2002 figures

7 Top personal and corporate tax rates
0.0 10.0 20.0 30.0 40.0 50.0 60.0 Slovak Republic Czech Republic Mexico Hungary Luxembourg New Zealand Korea Portugal Greece United Kingdom Poland Turkey United States Ireland Switzerland Iceland Spain Italy Canada Germany Norway Australia Austria Japan Netherlands Finland Belgium France Sweden Denmark % Top CIT Rate Top PIT Rate Countries ranked by top PIT Rate 2004 CIT – OECD average = 30 CIT – EU average = 31 PIT – OECD average = 44 PIT – EU average = 48 Includes Central, State and Local Taxes

8 The tax wedge – income tax and social security contributions as % of labour costs
Single individual at average earnings 2004 10 20 30 40 50 60 % Mexico Korea New Zealand Ireland Japan Australia Switzerland United States Iceland United Kingdom Luxembourg Canada Portugal Greece Norway Spain Denmark Slovak Republic Turkey Poland Netherlands Czech Republic Finland Austria Italy Hungary France Sweden Germany Belgium Personal Income Tax Employee Social Security Contr. Employer Social Security Contr. and payroll taxes

9 Top statutory personal plus corporate tax rates on dividend income(1), 2003
70.0 65.0 60.0 EU15 Avg 47.9 55.0 OECD Avg 46.4 50.0 45.0 40.0 % 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 Italy Iceland Spain Norway Finland Mexico Greece Poland Belgium Turkey Korea Portugal Australia Ireland Sweden Austria Japan Germany Hungary Canada France Denmark New Zealand Luxembourg Netherlands Switzerland Slovak Republic Czech Republic United Kingdom United States 1) This is the overall (corporate plus personal) top marginal tax rate on distribution of domestic source profits to a resident individual shareholder, taking account of imputation systems, dividend tax credits etc.

10 R&D Tax Treatment of Large Firms, 2001/2002
0.6 0.4 Spain Portugal Australia Canada Austria Korea Denmark United Kingdom Netherlands United States France Mexico Japan Ireland Belgium Finland Switzerland Iceland Greece Sweden Norway New Zealand Germany Italy Comparative R&D tax incentives calculated as one minus B-index 0.2 0.0 -0.2

11 VAT – tax rates and revenues (1)
5 10 15 20 25 30 DENMARK HUNGARY (2) SWEDEN ICELAND NORWAY CZECH REPUBLIC FINLAND POLAND BELGIUM IRELAND AUSTRIA ITALY SLOVAK REPUBLIC (2) FRANCE NETHERLANDS PORTUGAL (3) GREECE (2) TURKEY UNITED KINGDOM OECD GERMANY SPAIN LUXEMBOURG MEXICO NEW ZEALAND AUSTRALIA (2) KOREA SWITZERLAND CANADA JAPAN (2) UNITED STATES VAT/sales tax revenues as % of total tax revenues VAT standard rate 2003 Countries ranked from highest VAT standard rate to lowest rate. The comparisons include all levels of government 2) revenue figure 3) revenue figure

12 Revenues from environmentally related taxes in per cent of GDP
5.0 1994 2001 4.5 4.0 3.5 3.0 Per cent of GDP 2.5 2.0 1.5 AUS BEL CZE FIN GER HUN IRL JAP LUX NET NOR POR ESP SWI UK 1.0 AUT CAN DEN FRA GRE ISL ITA KOR MEX NZE POL SVK SWE TUR US 0.5 0.0 Italy Austria Belgium Canada Finland France Japan Korea Greece Poland Denmark Hungary Iceland Ireland Mexico Norway Spain Portugal Sweden Turkey Australia Germany Luxembourg Netherlands New Zealand Switzerland United States Czech Republic Slovak Republic United Kindom Weighted average Arithmetic average

13 Since mid 1980s a Wave of Tax Reform in All OECD Countries Driven by:
A fairer tax system similar treatment for similarly placed taxpayers (horizontal equity) achieve desired allocation of tax burden by income level (vertical equity) improved compliance An efficient and competitive tax system promoting a competitive and flexible fiscal environment making work, savings and investment pay A simpler tax system reduce compliance costs for taxpayers reduce administrative costs for tax authorities The need for revenues Protecting the environment through tax and related measures Balance between revenues and expenditures of each level of government Dealing with the restraints imposed by the ECJ

14 Main Characteristics of Tax Reform in OECD Countries
Lower tax rates; broader tax bases Move towards flatter personal income taxes Move towards dual income taxes (lower rates on capital than on labour) Integrate social benefits into the tax system (earned income tax credits) Relief for taxation of dividend income Change in mix of income and consumption taxes (VAT) Reduction of complexity Introduction of market based environment instruments

15 Three Approaches to Taxing Income
Comprehensive income taxes Dual income taxes Flat taxes

16 Flat Tax Rate Systems Disposable income (YD) No tax (Y=YD)
Single rate, no basic tax allowance No tax (Y=YD) Disposable income (YD) Basic allowance Single rate with basic tax allowance Basic income Single rate with refundable tax credit (basic income) Gross income (Y)

17 Successful Tax Reform Requires Administrative Reform
Tax administrations face challenges due to globalization proliferation of tax shelters and abuse of tax havens changing attitudes towards compliance The response of OECD tax administrations move to integrated tax administrations administration by segment/function rather than by type of tax move to cumulative withholding and information reporting improved risk management better access to information Use of new technologies Good compliance requires good taxpayer service and effective enforcement Putting tax compliance on the good corporate governance agenda

18 Key Elements for successful tax reform: Experience of OECD Countries
Political champions who can mobilize popular support Clear and well-articulated principles A package approach, with gains and pains intricately linked Policy reform matched by administrative reform Limited time between announcement and full implementation Transition rules matter Education and guidance package available from Day One

Download ppt "Tax Reform: An International Perspective"

Similar presentations

1 Relative GDP per capita 2000 PPPs, OECD = 1001 26 countries. Estimates for 2003. Source: OECD National Accounts.

1 Relative GDP per capita 2000 PPPs, OECD = countries. Estimates for Source: OECD National Accounts.
OECD Pension Fund Portfolio Allocation www.kapital-plus.net mr.sc. Tomislav Petrov.

OECD Pension Fund Portfolio Allocation mr.sc. Tomislav Petrov.
International Tax Reform Prepared for SIEPR-TPC Tax Reform Conference Rosanne Altshuler January 18, 2013.

International Tax Reform Prepared for SIEPR-TPC Tax Reform Conference Rosanne Altshuler January 18, 2013.
Canada A Tax System to Encourage Investment 1 More businesses have access to tax free rollovers. -Rollover amount: $2 million -Eligibility size: $50 million.

Canada A Tax System to Encourage Investment 1 More businesses have access to tax free rollovers. -Rollover amount: $2 million -Eligibility size: $50 million.
“American high-school education is ‘obsolete’… In 2001, India graduated almost a million more students from college than the United States did. China graduates.

“American high-school education is ‘obsolete’… In 2001, India graduated almost a million more students from college than the United States did. China graduates.
Quaker Council for European Affairs – A Quaker Voice in Europe The European Union Budget Overview and Income.

Quaker Council for European Affairs – A Quaker Voice in Europe The European Union Budget Overview and Income.
Carlo Cottarelli Director, Fiscal Affairs Department October 2011.

Carlo Cottarelli Director, Fiscal Affairs Department October 2011.
Pension systems during the financial and economic crisis Edward Whitehouse Social Policy division, OECD.

Pension systems during the financial and economic crisis Edward Whitehouse Social Policy division, OECD.
© The Treasury 2009 Job Summit John Whitehead, Secretary to the Treasury.

© The Treasury 2009 Job Summit John Whitehead, Secretary to the Treasury.
Tax Reform: An International Perspective The President’s Advisory Panel on Federal Tax Reform San Francisco March 31, 2005 By Jeffrey Owens Organisation.

Tax Reform: An International Perspective The President’s Advisory Panel on Federal Tax Reform San Francisco March 31, 2005 By Jeffrey Owens Organisation.
How is the budget raised The own resource system – The overall amount of own resources needed to finance the budget is determined by total expenditure.

How is the budget raised The own resource system – The overall amount of own resources needed to finance the budget is determined by total expenditure.
Centre for Tax Policy and Administration Organisation for Economic Co-operation and Development Tax Burden Indicators for Labour (Taxing Wages model) and.

Centre for Tax Policy and Administration Organisation for Economic Co-operation and Development Tax Burden Indicators for Labour (Taxing Wages model) and.
Poverty & Human Capability 101 Introductory Class.

Poverty & Human Capability 101 Introductory Class.
Page 1 Recording of this session via any media type is strictly prohibited. ACA Impact on Workers’ Compensation.

Page 1 Recording of this session via any media type is strictly prohibited. ACA Impact on Workers’ Compensation.
BellRinger 3/23/2009 1.What do you think is the richest country in the world today? 2.How do you think economists should measure a country’s wealth? We.

BellRinger 3/23/ What do you think is the richest country in the world today? 2.How do you think economists should measure a country’s wealth? We.
New Skills for New Jobs: Action Now Professor Mike Campbell OBE Director of Research and Policy ETUC Conference International Trade Union House, Brussels.

New Skills for New Jobs: Action Now Professor Mike Campbell OBE Director of Research and Policy ETUC Conference International Trade Union House, Brussels.
Treasurer’s National Press Club Address 11 May 2005.

Treasurer’s National Press Club Address 11 May 2005.
7 - 1 Copyright McGraw-Hill/Irwin, 2005 Assessing the Economy’s Performance Gross Domestic Product Expenditures Approach Income Approach Other National.

7 - 1 Copyright McGraw-Hill/Irwin, 2005 Assessing the Economy’s Performance Gross Domestic Product Expenditures Approach Income Approach Other National.
OECD Organisation for Economic Co-operation and Development Organisation and Content Overview.

OECD Organisation for Economic Co-operation and Development Organisation and Content Overview.
Environmental issues and local development Partnerships and the Green Economy Styria, 11 th October 2010 Gabriela Miranda

Environmental issues and local development Partnerships and the Green Economy Styria, 11 th October 2010 Gabriela Miranda

Similar presentations

Ads by Google