Noel Grima

While Malta's tax-to-GDP ratio at 35% is still below the EU and the euro-area average, it is creeping up at a steady pace, according to figures announced by Eurostat last week.

The overall tax-to-GDP ratio, meaning the sum of taxes and net social contributions as a percentage of GDP, stood at 40.0% in the European Union in 2014, compared with 39.9% in 2013. In the euro area, tax revenue accounted in 2014 for 41.5% of GDP, up from 41.2% in 2013.

Over recent years, the tax-to-GDP ratio in both zones has increased continuously since its low point in 2010.

According to the figures released by Eurostat, Malta had the third highest increase in taxes in 2014.

Compared with 2013, the tax-to-GDP ratio increased in 2014 in a majority of Member States, with the largest risebeing observed in Denmark (from 48.1% in 2013 to 50.8% in 2014), ahead of Cyprus (from 31.6% to 34.2%) and Malta (from 33.6% to 35.0%).

In contrast, decreases were recorded in eight Member States, notably in the Czech Republic (from 34.8% in 2013 to 34.1% in 2014) and the United Kingdom (from 34.9% to 34.4%).

The tax-to-GDP ratio varies significantly between Member States, with the highest share of taxes and social contributions in percentage of GDP in 2014 being recorded in Denmark (50.8%), followed by Belgium and France (both 47.9%), Finland (44.0%), Austria (43.8%), Italy and Sweden (both 43.7%). At the opposite end of the scale, Romania (27.7%), Bulgaria (27.8%), Lithuania (28.0%) and Latvia (29.2%) registered the lowest ratios.