The OECD released its report on Consumption Tax Trends 2024 on 21 November 2024. According to the new report, which presents cross-country detailed comparative data on consumption tax rates, tax bases and design trends, most OECD countries have implemented reforms to ensure that VAT is effectively collected on online sales, in line with OECD standards, ensuring a level playing field between bricks-and-mortar businesses and online merchants.
Some highlights:
- In OECD countries, consumption taxes accounted for 9.9% of GDP and 29.6% of total tax revenues in 2022, with VAT being the largest category, generating 20.8% of total revenue.
- Between 2020 and 2022, consumption tax-to-GDP ratios declined in 12 OECD countries, increased in 22, and remained unchanged in 4. VAT revenues increased slightly, contributing more than 20% of total taxes in 21 out of 37 OECD countries with VAT.
- Revenues from taxes on specific goods and services, primarily excises, have declined as a percentage of GDP and total tax revenue. Standard VAT rates increased slightly in 2024, with three countries raising their rates.
- All OECD countries with VAT apply reduced rates for specific policy objectives, and have implemented rules for online sales and e-commerce. Digitalisation has led to increased electronic reporting requirements for VAT-relevant information.
- Excise duties aim to influence consumer behavior, particularly regarding health and the environment. Car taxation increasingly focuses on promoting low-polluting vehicles, with many countries offering tax incentives for electric and hybrid vehicles.
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