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The rise in the tax burden as a proportion of Gross Domestic Product registered the highest increase in Malta and Cyprus from the EU-27 from 1995 to 2005, according to the latest statistics released by Eurostat yesterday.
In fact, the tax burden in Malta rose from 27.3 per cent in 1995 to 35.3 per cent in 2005. This rise was only second to Cyprus, which had a slightly higher rise from 26.7 percent to 35.6 percent. However, although our tax rate is considered to be high, it is still way below the top pace setters in the EU-27 which are Sweden and Denmark at 51.3 and 50.3 percent respectively.
For the EU27 as a whole, the average implicit tax rate (ITR) on labour (including social contributions), the preferred indicator for the average tax burden, amounted to 35.2% in 2005. The decline registered since 2000 stopped in 2005, despite a wide consensus on the desirability of reducing labour taxes. However, the tax burden is still lower than its maximum of 36.5% in 2000. Among the Member States, in 2005 this rate ranged from 22.1% in Malta, 24.6% in Cyprus, 25.5% in the United Kingdom and 25.6% in Ireland to 46.4% in Sweden, 43.1% in Italy, 42.8% in Belgium and 42.1% in France. In the new Member States, Bulgaria and Romania, the rate amounted to 34.2% and 26.7% respectively. Despite the presence of a number of low-taxing countries, taxation on labour is, on average, much higher in the EU than in the other main industrialised economies.
Malta is still amongst the countries with the highest personal and corporate tax burden of 35 per cent amongst the EU 27, just behind Germany and Italy at 38.7 and 37.3 per cent respectively. This contrasts markedly with other countries such as Latvia and Ireland at 15 and 12.5 per cent with Bulgaria and Cyprus charging rates as low as 10 per cent. In fact, the Eurostat press release comments that on average, new member states display markedly lower top rates. |
