Analysis on the Taxation in the EU Member States

Author:Ana Alexandru
The Youth of Today - The Generation of the Global Development - Special Section for
Students and MA Students
Analysis on the Taxation in the EU Member States
Ana Alexandru1
Abstract: The purpose of this paper is to perform an analysis on the tax revenue collected by the Member
States. The analysis takes into account the period 2000-2013 and highlights the main reasons reforms
Member States' tax systems
Keywords: taxation; fiscal revenues; tax rate
JEL Classification: H20; H25; E62
1 Introduction
In 2012, the level of taxation in EU-28 was 39.4% of GDP. The level of taxation in the EU is high
compared to countries like Russia 35.6%, and New Zealand, 31.8%. Countries which are less
developed usually have a relatively low weight. High tax rate in the EU is not new; it makes its
presence felt since the last third of the 20 century. In that time, the role of the public sector was
expanded, this led to a large increase in tax rate 1970, and to a lesser extent, in the 1980s and early
1990. Member states have adopted several packages of measures for fiscal consolidation after the first
Treaty of Maastricht and the Stability and Growth Pact. In many Member States, it is possible to
widen the tax base to increase revenue collection potential, opportunity to reduce the tax rate or
simplify the taxation. Many standard taxation systems have various exemptions, allowances, reduced
tariffs and other tax systems known as "tax expenditures" This cannot always be justified, may not be
the most effective tools for social goals. Member States have a more effective strategy in terms of
raising legal tax rates. In some states, the process of consolidation was mainly based on the restriction
or reorganization of primary public expenditure and in others the focus was on tax increasing.
2 Tax Rate in EU-28
2.1 General Overview
Tax rate in GDP surpassed the crisis in 2012 and will continue to increase in 2013. The tax rate in
GDP began with a decrease in tax 2000 and increased by 2007 in the euro area and the EU-28. Income
tax decreased in 2010 in both the euro area and the EU-28.
1Student, Faculty of Economic Sciences, “Danubius” University of Galati, Romania, Address: 3 Galati Boulevard, 800654
Galati, Romania, Tel.: +40.372.361.102, fax: +40.372.361.290, Corresponding author:

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