The tax burden in the UK will rise to post-war levels

The tax burden on the UK economy in the coming years will rise to the level of the late post-war 1940s. This forecast was made by experts from the British Institute for Fiscal Studies (IFS) in the report “This Parliament will be a record holder for tax increases.” At the time of the last parliamentary elections in 2019, UK tax revenues amounted to about 33% of GDP, the study authors recall. By the time of the next campaign in 2024, the fiscal burden will increase to 37%. Even in the post-war period, taxes did not reach such a level.

The UK government will increase tax revenue by more than £100 billion next year. This would equate to an increase in burden of about 3,500 pounds per household, although the burden would certainly be unevenly distributed, the authors note. During 2008–2019 The kingdom’s tax burden remained virtually unchanged – the figure ranged from 32 to 33% of GDP with a range of 0.2 percentage points. The burden began to increase in 2020–2021. and approached 37% in 2023. The load will continue to grow in the future. By 2027, the figure will reach 38%. The IFS notes that one of the reasons for this breakthrough was the pandemic, the impact of which on the economy is comparable to the consequences of World War II. At the same time, the institute admits that to a large extent the reason for the increase in taxes was the increase in government spending – for example, to expand the staff of the police and medical institutions.

On average, across OECD countries, tax revenues amounted to 34.11% of GDP at the end of 2021. In Germany the figure was 39.51%, in Spain – 38.35%, in Italy – 43.29%, in France – 45.15%. The tax burden on the Russian economy in 2022 amounted to 32.4% of GDP, increasing by 0.39 percentage points compared to 2021, according to data from the Ministry of Finance. The OECD estimated the figure for Russia at 31.29% in 2022 (estimates vary due to approaches to determining the total amount of tax revenues).