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02 December 2019 How VAT is affecting disposable income in the EU As a percentage of global taxation, VAT has grown steadily in importance from less than 5% in the 1960s to a peak of just over 20% in 2016, according to OECD data. VAT became especially popular after the OECD declared it to be less harmful to a jurisdiction’s growth than corporate income and personal income taxes. However, VAT and consumption taxes in general are regressive, placing more distribution burdens on lower-income people unless they are adjusted. Charts in this EY article, illustrate how indirect tax revenues and disposable incomes have evolved over the last decade in the European Union. Document ID: 2019-6503 |
