UK has G8’s highest taxes on sales and consumption
CONSUMERS in the UK face the highest burden of sales taxes in the G8, data revealed this morning.
Some 16 per cent of the total price of a representative basket of goods and services is taken in tax by the government, according to accountancy firm UHY Hacker Young, compared to 12.3 per cent on average across the G8.
Across all the countries surveyed, governments took 13.8 per cent of the total value of the basket in tax, while the average for the Asia-Pacific region was just 8.2 per cent. On the other hand governments of European countries in the survey took some 15.5 per cent of the representative basket in tax.
VAT partner Simon Newark at UHY Hacker Young said the high tax was hampering the economic recovery, being one more pressure on tight consumer budgets. “Like all countries with high sales taxes, the UK’s sales and consumption taxes are holding back the economy by putting pressure on disposable incomes,” Newark said. “VAT in the UK is now higher than Germany, where it is 19 per cent, and even France, where VAT stands at 19.6 per cent.”
When looking at petrol, the UK’s tax system is even more burdensome, with 57.7 per cent of total prices going to the state, the fifth highest proportion in the study.
Only neighbours Ireland, France, Germany, and Italy rank above it. Every country in the world other than the UK, these four countries, and the Netherlands, takes less than half the total cost of petrol in tax. The global average is just 36.2 per cent, the study shows.
And it is not just motorists who are being hit by high levies. Smokers pay 76.8 per cent of the price of a packet of cigarettes to the exchequer, compared to a global average of just 51.25 per cent. Drinkers fork out 36.4 per cent of the price of a bottle of wine – compared to a global average of 22.8 per cent.
Even iPads faced atypically high tax burdens in the UK – 16.7 per cent of the total price – versus just 5.7 per cent in some states in the US, 9.1 per cent in Australia and 16 per cent in Germany.