France is no longer the country that taxes the most on a European level. According to data revealed this Friday, October 31, by Eurostat, Denmark is currently the one with the highest tax ratio in relation to gross domestic product (GDP) and surpasses, precisely, France.
In 2024, taxes and social contributions represented 45.8% of Danish GDP, compared to 45.3% in France. This is a very slight difference of 0.5 percentage points. Belgium completes the podium of the European countries with the highest taxes with a tax/GDP ratio of 45.1%.
France had, according to Eurostat, the highest proportion in the EU since at least 2015. That year, it even reached a record level of 47.9%.
The decline in recent years in France can be explained by the fact that taxation has not followed the evolution of activity in the country in recent years. This is also what is at the origin of the increase in deficits in recent years, as Bruno Le Maire explained in May 2024.
Lower than expected VAT revenues on consumption, as well as those from real estate transactions or even disappointing corporate tax performance or contributions that have increased less rapidly than the level of activity: these reasons are put forward to explain this strong downward elasticity of tax revenues.
A ratio greater than 40% throughout the European Union
In general, the burden of taxes has increased in the European Union. “The total tax/GDP ratio (…) stood at 40.4% in the EU in 2024, compared to 39.9% in 2023. In the euro area, the tax/GDP ratio also increased, from 40.5% in 2023 to 40.9% in 2024,” explains Eurostat.
The tax burden increases in 22 EU countries
“In 2024, compared to 2023, the tax-to-GDP ratio increased in 22 EU countries, with the largest increases seen in Malta (from 26.7% in 2023 to 29.3% in 2024), Latvia (33.0% in 2023 and 35.5% in 2024) and Slovenia (from 36.8% in 2024).
In France, on the other hand, the weight of taxes in GDP fell slightly: the ratio stood at 45.6% in 2023, or 0.3 points more than in 2024.
However, taxes vary greatly between European countries. If the weight of taxes and social contributions exceeds 45% of GDP in France, Belgium and Denmark, it represents only 22.1% in Ireland, 28.8% in Romania and 29.3% in Malta.
Comparisons that may have limits. The differences between the types of mandatory deductions are due in part to the different scope of public administrations from one country to another, which result from choices of economic and social systems that give more or less space to the market or public intervention to satisfy the needs of households and companies, explains the specialized site Fipeco.
This is particularly the case for health and retirement insurance, which explains part of these differences. In fact, in some countries they are the responsibility of private companies and individual decisions and are not financed by mandatory taxes.
But these figures also result in part from the efficiency of public services and the degree of redistribution in each country.
Source: BFM TV
