According to Eurostat’s latest report, Cyprus recorded the highest growth in tax-to-GDP ratio among European Union member states in 2023, despite remaining under the EU average. This increase came as the EU’s overall tax-to-GDP ratio declined slightly over the year.
In 2023, the tax-to-GDP ratio, which includes total taxes and net social contributions as a share of the gross domestic product (GDP), fell to 40.0% across the EU, down from 40.7% in 2022. A similar trend was seen in the eurozone, where the ratio dropped from 41.4% in 2022 to 40.6% in 2023.
Out of all member states, 11 experienced an uptick in their tax-to-GDP ratios compared to 2022, with Cyprus showing the largest increase, rising from 35.9% to 38.8%. Luxembourg followed closely with an increase from 40.2% to 42.8%. On the other end of the spectrum, 12 EU nations saw declines in their ratios. Greece and France marked the most significant decreases, with Greece’s ratio falling from 42.8% to 40.7% and France’s from 47.6% to 45.6%.
In absolute terms, the EU saw an increase in total revenue from taxes and social contributions, adding €308 billion from 2022 to reach €6.883 trillion in 2023.
The data also revealed considerable variation among countries. France, Belgium, and Denmark recorded the highest tax-to-GDP ratios, standing at 45.6%, 44.8%, and 44.1%, respectively. Meanwhile, Ireland (22.7%), Romania (27.0%), and Malta (27.1%) registered the lowest ratios.
Source: www.stockwatch.com.cy