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Tax burden at 20-year low, finds OECD

16 Dec 10

But body draws fire for backing tax hike for home owners

Tax revenue as a proportion of economic output has fallen to a 20-year low across the world, according to a major new study by the OECD, while the UK is one of only seven countries which has seen tax fall by this measure for three consecutive years.

The OECD said: "Tax revenues fell in cash terms during 2009 in most OECD countries, driven downward by declining economic activity and tax cuts aimed at cushioning the effects of the recession that followed the financial crisis"

However, the body has also drawn criticism for its recommendation that countries looking to raise taxes to balance their books should target residential property. A levy on owner-occupiers would, it argues, provide greater predictability, be harder to evade and prevent future housing bubbles. It also pointed out that residential property is generally given a more favourable tax treatment than other forms of “investment”.

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