Tax burden down slightly

Close to €2 billion in total tax revenue made it to the government's coffers last year, 4.1 per cent more than in the previous year.

According to figures issued by the National Statistics Office, €1,967.3 million were collected in tax, with a tax burden of 34.6 per cent, 0.1 per cent less than in 2007. The overall tax burden is the total tax revenue expressed as a percentage of Gross Domestic Product.

Tax revenue can be classified under three main headings: indirect taxes, direct taxes and social security contributions.

Indirect taxes are those linked to production and imports, and in 2008 these taxes stood at €857.7 million and contributed to 40.2 per cent of the increase in total tax revenues. This category is mainly made up of VAT and taxes on products (including excise duties).

Consumption tax accounts for €458.4 million, an increase of €38.5 million over the previous year. Taxes on products, on the other hand, saw a decline of €10.2 million.

Direct tax includes tax on income, wealth and other current taxes. During 2008, direct taxes saw an increase of €16.2 million to €757.8 million, making up 38.5 per cent of total revenue. This was due to substantial returns from corporate and income tax, up by €18.8 million and €6.8 million respectively.

Social contributions also saw an increase of €29.6 million to €351.7 million, making up 17.9 per cent of total tax revenue.