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Sweden has a center right government since 2006. This government has reduced the total taxes as percentage of GDP from 48,8 in 2006 to 44,0 in 2012. Only Denmark has higher total taxes. In 2013 the corporate income tax was reduced to 22 percent. Including taxes on income paid by employers, Sweden still has the highest marginal tax rate in the world, 70 percent. The Swedish National Tax Agency is perhaps more important on tax policy than the ministry of finance.

Fiscal consolidation should have been the priority of the government in 2012, but due to early elections in spring, most of the measures were deferred to year 2013. As a result, public de?cit of 4.6% of GDP did not change compared to previous year. New leftist government applied some moderate changes in taxation and social contributions in 2012, but main tax package came into force in 2013. Flat tax rate was wiped out, tax hikes in corporate and personal income tax rate has been introduced. With a 6% growth of total government expenditures in 2012, the public de?cit exceeds 10% of total government tax revenues leaving the question of further tax hikes open.

For many years since the break-up of Yugoslavia in early 90’s, Slovenia represented a success story which was not frequent among transitional countries. The world’s ?nancial crisis came to Slovenia in 2008 and caught the country totally unprepared. The value of most shares decreased sharply thus resulting in serious losses which in turn became a problem for Slovenian banking sector due to the fact the banks in most cases were ?nancing purchases of the shares for the investors (state-owned banks have the biggest proportion of bad debts). Since then Slovenia is facing general economic downturn and in 2013 Slovenia the banking system is still not working properly resulting in very low activity of domestic banks. On top of this, this country is facing a recession – GDP fell by 2,3% in 2012 and is very likely to further decrease by 2,1% in year 2013. The investment activities decreased tremendously and the almost entire construction sector went bankrupt in 2012. In addition Slovenia was very slow in cutting the expenditures – simply, there was not enough political will to adopt crucial structural reforms in the area of social welfare (labor and pension legislation, social transfers, … ) in the mandate of Slovenian government between 2008 and 2011.

The economic crisis in Spain highlighted the lack of response from the Government as well as the wasteful public spending, both mirrored in the huge public de?cits and the resultant sovereign debt crisis. The Socialist Party called early general elections for November 2011 due to lack of popular support and credibility. The alternative, the conservative Party (Popular Party) went to the election promising not to raise taxes and, even, lower them, and bring order to public ?nances.

The big picture

Dutch fiscal policy has recently been designed predominantly to speed up fiscal consolidation and to reduce public deficits. This takes place amidst a recession in 2012, where Dutch GDP shrank by 1.3%, after slightly positive yet very low growth in 2011. The fiscal deficit is expected to be at 3.3% of GDP in 2013. It would therefore be an extreme exaggeration to speak of austerity policies in the Netherlands, but in the current volatile framework of the Eurozone crisis, where interest levels can increase quickly if bondholders lose confidence in a country’s ability to service its debt, the Dutch are also cautious enough to refrain from uncontrolled deficit spending. For Dutch private households, declining property price levels in combination with high levels of private debt have been a problem. Households in the Netherlands are heavily invested in property, and also suffer from declining real wages with inflation rates slightly above the Eurozone average.

Given this mostly pessimistic macroeconomic outlook and an emphasis on shortterm fiscal consolidation, a proposed reduction of the top corporate income tax rate from 25% to 24%, which featured prominently in the Dutch government’s 2011 tax policy paper, has not been enacted. Due to fiscal motivations, the general tendency has been more in the direction of tax rate increases, which of course may result in problems for the Netherlands’ long-run growth prospects. Nevertheless, the Dutch have so far preferred to consolidate through revenue increases rather than decreases in public spending, which to the contrary has still increased to a small extent in 2012. For the coming years, the new grand coalition government does however also plan substantial spending cuts, in particular in social transfers and development aid. The regular pension age gradually increases from 65 years today to 67 years in 2024. Attempts to cut the budget had earlier led to a demise of the former centre-right government, as the party of rightwing populist Geert Wilders refused to support budget cuts, which he denounced as having been imposed by Brussels.

Systemic chaos

Looking at the main tax types, there was no change in the corporate profit tax in 2012, the rate of the personal income tax remained 16% but the tax temporarily became progressive due to changes in the calculation of the tax base while the standard VAT rate increased from 25% to 27%. Furthermore, the sectorial taxes previously claimed to be temporary were definitively incorporated in the tax system, and a number of small-volume consumption taxes were introduced under the pressure for continuous budget adjustments due to the deteriorating economic figures.

Lithuania is often viewed as a success story of austerity measures. Although the country did reduce public spending, it also suffered from high budget deficits which translated into a sharp public debt growth.

An almost continuous wave of laws implementing an important number of “miscellaneous measures”, or “containing tax and financial matters” has struck Belgium in 2012.The present climate of crisis has led Belgian authorities to seek new sources of financing or to enforce, sometimes at any cost, thus regardless of several important rights of the taxpayers.

As a result, the situation of Belgian taxpayers worsened: by reference to OECD’s numbers, natural persons are taxed in Belgium at a 55% of his revenue (total taxation), that means at least 10 points above than its neighbors (independent audits state a number of 57%).

In the field of corporate taxation, following OECD’s numbers, Belgium ranks among the 5 most taxed countries in the world.

Unfortunately, one has to be pessimist for the future – at least in the near future – considering that growth is blocked to 0% for 2013 but also because the future measures for 2013 have been announced or discussed will most likely have a negative impact on the situation.

2012 was thus rich in tax measures. The reader will find bellow the measures which present an interest, whether direct or indirect, on the principles plan.

Austria today faces a double challenge: to consolidate the country’s fiscal position through effective fiscal and structural policies aimed at reducing the budget deficit and lowering the public debt to GDP ratio. In 2012, Austria managed to narrow its public deficit below 3 percent according to European Union’s Maastricht criteria. In 2012 the public deficit was 2.5% and is estimated to fall to 2.2% in 2013, below the European criteria. State debt is set to peak at 74.7% of GDP in 2012 and 75.4 in 2013, above the EU norm of 60%. Regarding taxation, most of the taxes rates remained unchanged with the exception of flight tax; however tax increases should be expected within 2013 due to the Austrian Consolidation Program 2012-2016. With that program the Austrian federal government is setting the course for a structural and sustainable consolidation of the federal budget, aiming to balance the budget in 2016 and reducing the public debt to 71% of GDP in 2016.