This is the fourteenth edition of Consumption Tax Trends, a biennial OECD publication. It presents cross-country comparative data on consumption taxes in OECD member countries, as at 1 January 2022.

Consumption tax revenues decreased slightly in 2020 to 9.9% of GDP in OECD countries on average, down from 10.0% in 2019 and 10.2% in 2018. The overall share of consumption taxes in total tax revenue decreased to 30.0% in 2020, compared to 30.6% in 2019 and 30.8% in 2018. This decline is mainly attributable to the continuously decreasing importance of taxes on specific goods and services (mostly on tobacco, alcoholic drinks and fuels, as well as some environment-related taxes) as a share of total taxation in OECD countries, on average. Value added taxes (VAT) produced 20.2% of total taxes in OECD countries on average in 2020. This makes VAT by far the main category of consumption taxes, generating almost three times as much tax revenue as excise duties that form the bulk of taxes on specific goods and services, accounting for 6.9% of total tax revenues in 2020 on average.

Consumption taxes For the purpose of this publication, “consumption taxes” are defined as all items under the heading 5100 if the OECD classification of taxes. account for approximately one third of total tax revenue collected in OECD countries. They have two common forms: taxes on general consumption (mainly value added taxes and retail sales taxes) and taxes on specific goods and services (mainly excise duties).

Although VAT systems are generally built on the basis of a common set of core principles, such as the principles of neutrality and of destination-based taxation (see Chapter 1), there is considerable diversity in the actual design and operation of these VAT systems in OECD countries. This is notably illustrated by the wide variety of reduced rates, exemptions and other preferential treatments and special regimes that are widely used in OECD countries, for practical or historical reasons, to support certain economic sector or to achieve equity or social objectives.

Although excise may be levied on a broad range of products, excise taxes on alcohol, tobacco and hydrocarbon oils in particular raise significant revenues for governments in all OECD countries. In recent decades, governments have increasingly used these taxes not only to raise revenue but also to influence customer behaviour where consumption of certain products is considered harmful to health or to the environment.

Taxes related to the purchase, ownership and usage of vehicles were introduced in most OECD countries in the first half of the 20th century and have become an important source of tax revenue for many governments. All member countries rely on a wide range of tax instruments to raise revenue from both private and commercial vehicle owners and road users. Vehicle and vehicle usage taxation in its widest definition represents a prime example of the use of the whole spectrum of consumption taxes for taxing vehicles and their use, including VAT as well as ad quantum or ad valorem taxes (see definitions in Chapter 3). Over time, many governments have integrated environmental and climate objectives to these instruments.