The share of government revenue from taxation and in the form of social contributions rose to 33.6 per cent last year from 33.2 per cent in 2015, the European Commission’s statistical office said.
Despite the increase, the share of tax to economic output in Cyprus was the seventh lowest in the EU together with that of Malta last year, right behind Spain’s 34.1 per cent and ahead of Slovakia’s 32.4 per cent, Eurostat said in a statement on its website. The EU average was 40 per cent and that in the euro area was 41.3 per cent.
France topped the list last year with 47.6 per cent followed by Denmark with 47.3 per cent and Belgium with 46.8 per cent, Eurostat said. The lowest ratio of tax to gross domestic product (GDP) was that of Ireland with 23.8 per cent followed by Romania and Bulgaria with 26 per cent and 29 per cent respectively.
Taxes on production and imports accounted last year in Cyprus 15.4 per cent of economic output which included value added tax revenue with 9.2 per cent, Eurostat said. Revenue from taxes on income was 9.7 per cent of the economy, broken down to 2.9 per cent on taxes on individuals or household income and 5.8 per cent on profits of corporations, including taxes on holding gains. The share of net social contributions was 8.5 per cent.
The ratio of revenue from corporate taxation of Cyprus, which often faces criticism over its comparably low corporate tax rate of 12.5 per cent, was the second-highest in the EU, right behind Malta’s 6.5 per cent, Eurostat said.
In the EU, the share of taxes on production and imports was on average 13.6 per cent last year compared to 13.2 per cent in the euro area, Eurostat said.
Taxes on income and wealth were 13 per cent of the EU’s GDP and 12.6 per cent of that of the euro area. Lastly, taxes on individual or household income was 9.3 per cent and 9.2 per cent of the EU’s and the euro area’s economy respectively while revenue from taxes on company income was in both cases 2.6 per cent.