Tax burden rising
The share of taxes in the Maltese economy has continued to rise in 2005, according to figures published in Brussels yesterday by Eurostat, the EU's statistical arm. Although the share of taxes as a percentage of Gross Domestic Product (GDP) in Malta is...
The share of taxes in the Maltese economy has continued to rise in 2005, according to figures published in Brussels yesterday by Eurostat, the EU's statistical arm. Although the share of taxes as a percentage of Gross Domestic Product (GDP) in Malta is still below EU average, in 2005 it experienced the second highest increase in the bloc.
Eurostat said that when compared to the preceding year, in 2005 Malta experienced the second highest increase in the tax to GDP ratio in the EU and hit the 37.7 percentage mark when compared to 36.2 per cent in 2004.
The difference in the dependence of the Maltese economy on taxation becomes more striking when comparing figures over a 10-year period. In 1995, the tax-to-GDP ratio stood at 31 per cent, or 6.7 percentage points lower than in 2005.
According to Eurostat, in 2005, tax revenue, defined as the total amount of taxes and social contributions, in the EU27 stood at 40.8 per cent of GDP, compared to 40.4 per cent a year before.
The Nordic countries, considered to be the most successful economies of the EU, are also the most highly taxed. In fact, in 2005, Sweden (52.1 per cent) recorded the highest ratio, followed by Denmark (51.2 per cent), Belgium (47.7 per cent), France (45.8 per cent), Finland (44 per cent) and Austria (43.6 per cent).
On the other hand, the lowest ratios were reported in Romania (28.8 per cent), Lithuania (29.2 per cent), Slovakia (29.5 per cent), Latvia (29.6 per cent), Estonia (31 per cent) and Ireland (32 per cent).
On a year on year basis, Cyprus was the only EU member state registering a steeper increase than Malta. In fact, its tax-to-GDP ratio rose from 34.1 per cent in 2004 to 36.2 per cent in 2005.