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How France is the most taxed country in the EU

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How France is the most taxed country in the EU
High taxes in France were a source of anger among yellow vest protesters. Photo: AFP
08:24 CET+01:00
You might have heard that taxes are high in France. Well the confirmation has come in a new report that declares France the most taxed country in the EU.

France is the top-taxed country in the European Union and Ireland the lowest, according to the latest figures  released on Wednesday by the bloc's statistics office Eurostat.

The tax-to-GDP ratio of France, calculated on the sum of taxes and net social contributions, was 48.4 percent in 2018, putting it ahead of Belgium on 47.2 percent and Denmark on 45.9 percent.

The EU average was 40.3 percent.

According to Eurostat, Ireland imposed the lowest burden, with a ratio of 23 percent. 

Romania, at 27.1 percent, and Bulgaria, at 29.9 percent, were the next least-taxed.

France has held the top spot since 2015.

Europe's biggest economy, Germany, had a tax-to-GDP ratio of 41.5 percent, which was pretty close to the average for the eurozone group of 19 EU members on 41.7 percent.

Eurostat noted that the rankings changed when each type of tax was looked at separately.

For income and wealth tax, for instance, Denmark stood out with a ratio of 28.9 percent, followed by Sweden and Belgium, whereas Romania, on 4.9 percent, and Lithuania and Bulgaria came bottom.

France was the champion in terms of social contributions, with a proportion of 18 percent, followed by Germany on 17.1 percent, while the lowest ratios were in Denmark, Sweden and Ireland.

These high social contributions and taxes have long been the source of anger among French workers, particularly lower middle classes and were a source of grievance for the 'yellow vest' protesters.

President Emmanuel Macron responded to the violent protests by announcing measures to cut billions of euros of taxes to boost workers' spending power.

READ ALSO ANALYSIS - Why it might be time to thank the 'yellow vests' for France's strong economy

But while workers in France might not enjoy being the 'most taxed in Europe' there is of course an upside to it all.

France is the country in the developed world that spends the most on social spending relative to the size of its economy. Although French governments have been under pressure for years to reduce public spending.

Expenditure on healthcare, pensions and other social services stood at 32 percent of GDP last year, the Organisation for Economic Cooperation and Development, a Paris-based inter-governmental research institution, found earlier this year.

Outlays have risen sharply since 1990, when they represented just under 25 percent of GDP, and are nearly triple the level of roughly 12 percent of GDP in 1960.

That trend is broadly in line with other developed countries, reflecting the development of more comprehensive welfare states and higher pension spending as more people live longer.

But France's outlays are well above the current average of 20.5 percent of GDP for the 36 OECD member countries, with pensions making up a large chunk of the cash benefits paid out every month.

In neighbouring Germany social spending is just 25 percent of GDP, while in the US it makes up just 19 percent.

 

 

 

 
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