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Light tax burden made worse by its mix

New OECD figures show that while Australia has relatively low taxation overall, it is skewed in a way that makes it seem one of the worst.

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Source: AAP


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Australia has one of the lightest tax burdens in the world - it's just structured in a way that makes it feel like one of the worst.

New figures show that among the 34 countries that make up the Organisation for Economic Co-operation and Development, Australia has the sixth-smallest tax burden.

But that burden is made worse because it relies heavily on personal and corporate taxes, rather than the GST.

Australia has one of the lowest consumption taxes in the bloc, at 10 per cent.

The OECD says its members' average GST or VAT was 19.2 per cent as of January 2015.

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The report, released in Paris on Thursday, notes that Australia's GST has not changed since its introduction in 2000.

"In contrast, 21 OECD countries have raised their standard VAT/GST rate at least once in the last six years," it says.

The OECD's revenue statistics 2015 report shows as a proportion of gross domestic product, tax in Australia measures 27.5 per cent as of 2013 compared to an OECD average of 34.2 per cent.

Compared with 2000, Australia's tax burden has eased from 30.4 per cent of GDP, while the OECD was the same as now at 34.2 per cent.

However, tax revenue from the personal income of Australians amounts to 39 per cent of GDP, the second highest within the OECD.

Revenue from corporate taxation also ranks second at 18 per cent of GDP.

The Australian government is in the middle of a tax review in which it hopes to change the tax mix to support economic growth.


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