COPENHAGEN, Dec. 4 (Xinhua) -- Denmark tops the list of countries with the highest tax burden, according to a new report released by the Organization for Economic Co-operation and Development (OECD), which assesses the tax burdens in the world's 37 most developed countries.
Denmark had the highest tax to GDP (gross domestic product) ratio in 2019 of 46.3 percent, stated the report released Thursday.
In second place for the past two years, Denmark was able to leapfrog previous incumbent France (in 2017 and 2018) due to a divergent increase in taxation compared to other OECD members.
"Between 2018 and 2019, the largest tax ratio increase was in Denmark, at two percentage points of GDP," read the annual publication "Revenue Statistics 2020," which compares tax and taxation structures in OECD countries.
"This was due to an increase in income taxes, 2.4 percentage points offset by a fall in consumption tax revenues other than the value added tax (VAT). There were no other countries with increases more than one percentage points."
According to the OECD report, Belgium, Sweden and Austria follow Denmark and France.
A special feature of the report examines the global financial crisis (GFC) of 2008 for insights into how the COVID-19 crisis and the policy actions taken in response to it by the OECD countries will affect future tax revenues, concluding that VAT systems are "vulnerable to economic shocks."
"The COVID-19 crisis is likely to have a bigger impact on consumption tax revenues than the GFC because the current crisis has affected consumption directly and to a far greater extent (than GFC) as a result of lockdowns, including the forced closure of businesses in certain sectors (e.g. tourism and hospitality)," the report noted.