Environmental tax statistics - detailed analysis


Data extracted in May 2018.

Planned article update: September 2019.

Highlights

The EU raised EUR 364.4 billion from environmental taxes in 2016.

Energy taxes represent more than three quarters of EU environmental tax revenue in 2016.

Environmental taxes, % of tax and social contributions, 2016

Author: Dorothea Jung

This article presents the results of a detailed analysis of data on environmental taxes in the European Union (EU), complementing the article on environmental tax statistics. It provides information on the structure, payers and evolution of environmental tax revenue.

An environmental tax is a tax whose tax base is a physical unit (or a proxy of it) of something that has a proven, specific negative impact on the environment and which is defined in the European System of Accounts (ESA 2010) as a tax.


Full article

General overview

In 2016, EU environmental tax revenue amounted to EUR 364.4 billion, accounting for 6.3% of total government revenue from taxes and social contributions.

The EU-28 raised EUR 364.4 billion from environmental taxes in 2016. Compared with 2015, there was a small increase, EUR 4.3 billion or 1%, in revenue from environmental taxes. Compared with 2002 there was a more substantial increase, EUR 100 billion or 38% (see details see Table 1).

In 2016, environmental tax revenue-to-GDP amounted to 2.4%, having fallen slightly in the 14 years under analysis (from 2.5% in 2002) given the overall slower pace of growth in environmental tax revenue compared to GDP over this period.


Table 1: Total environmental tax revenue in EU-28 by type of tax, 2002-2016 - Source: Eurostat (env_ac_tax) (nama_10_gdp) and (gov_10a_taxag)

The Roadmap to a Resource Efficient Europe (European Commission, 2011) includes the following milestone: by 2020, a major shift from taxation of labour towards environmental taxation will lead to a substantial increase in the share of environmental taxes in government revenue, in line with the best practice of EU countries.

As illustrated in Figure 1, the share of EU-28 environmental tax revenue in total government revenue from taxes and social contributions (TSC[1]) decreased between 2002 and 2016 by 0.5 percentage points, from 6.8% to 6.3%. There was a significant fall in the ratio, by 0.8 percentage points of TSC (from 6.8% to 6.0%), in 2002-2008. Following a fall in government revenue in 2009 caused by the economic and financial crisis, the share rebounded slightly, increasing to 6.3%, and remained relatively stable at 6.3%-6.4%, in subsequent years. As a result, no major progress has been made until now in the implementation of the resource efficiency policy objective.

Figure 1: Environmental tax revenue by type, EU-28, 2002-2016 (EUR million and % TSC) - Source: Eurostat (env_ac_tax)

Majority of environmental tax revenue from energy taxes in 2016

Energy taxes represent more than three quarters of EU-28 environmental tax revenue in 2016

Environmental tax revenue is broken down into four main categories: (i) energy taxes, (ii) transport taxes, (iii) pollution taxes and (iv) resource taxes. Table 1 presents the structure of environmental tax revenue by category, in EUR million and as a % of GDP and TSC, for 2002-2016. Given the small share of pollution and resource taxes in total environmental tax revenue and the problems in assigning some minor national taxes to one of the tax categories, these two types of taxes have often been grouped together in this article in order to present data on the structure of the environmental taxes.

Energy taxes include taxes on energy products (e.g. coal, oil products, natural gas and electricity) used for both stationary purposes and transport purposes. In 2016, the vast majority of environmental tax revenue (76.9%) came from energy taxes, i.e. on the energy-related tax base. By convention, CO2 taxes are also included in this tax category as they are usually levied on energy products.

Transport taxes mainly include taxes related to the ownership and use of motor vehicles. In 2016, transport taxes were the second most important source of environmental tax revenue in the EU, accounting for 19.7% of the total.

Pollution and resource taxes cover different types of taxes: taxes on the extraction of raw materials; on measured or estimated emissions to air (e.g. NOx, SO2) and water; on noise and on the management of waste. Only 3.4% of EU-28 total environmental tax revenue was raised from pollution and resource taxes in 2016.

Since 2002, distribution of the tax categories has remained roughly the same, with no or very small changes (by less than 1 percentage point) in the share of energy taxes, transport taxes and pollution/resource taxes in total. As energy tax revenue accounts for more than 77% of environmental taxes, its development determines to a large extent the trend for the total revenue of environmental taxes. In 2016, EU revenue from energy taxes was around EUR 76 billion higher than in 2002. This corresponds to an increase of 37%.

In 2002-2016, transport taxes increased by 41% (EUR 21 billion), and taxes on pollution and resources by 36% (EUR 3 billion).

CO2 taxes as a distinct sub-category of energy taxes

CO2 taxes or carbon taxes are levied on the carbon content of fossil fuels. While all energy taxes increase the price of energy products, CO2 taxes must have a clear tax base (carbon content). The effect of a CO2 tax, i.e. different from an energy tax, must also create an incentive to use a fuel with lower carbon content.

CO2 taxes are regarded as a borderline case between energy and pollution taxes. However, they are recorded as energy taxes in EU statistics given that they are levied on energy products and have usually been introduced as a substitute for other energy taxes. The revenue from these taxes can be substantial compared to the revenue from pollution taxes, and the recording of CO2 taxes with pollution taxes would distort both the time series at national level and an international comparison.

At present, this type of tax is still not very common in the EU. The majority of EU countries do not have CO2 taxes as a part of energy taxation, except Sweden, Denmark, Slovenia, Ireland, France, Finland and Portugal. In terms of European Free Trade Association (EFTA) countries, Norway has such a tax. CO2 taxes also cover revenue from the auctions of emission permits under the EU Emissions Trading System (EU ETS).

Emission permits

The payments collected by EU Member States for emission permits (emission allowances) are one example of CO2 taxes. Governments are increasingly using such systems, based on a cap and tradeprinciple, to control total CO2 emissions. The EU ETS was introduced in 2005. Up to 2012, government allocated allowances for free. However, auctioning has been the default method for allocating allowances within phase 3 of the EU ETS since 2013. In 2013, over 40% of the allowances were auctioned; this proportion has been increasing, and is expected to further increase before phase 3 ends in 2020. Governments should record the proceeds from an auction of emission trading allowances as other taxes on production (D.29) on an accrual basis at the time of emission, i.e. only in the year when the permits are used (surrendered). Total CO2 tax revenue relating to EU ETS allowances reported by EU countries amounted to around EUR 2.0 billion in 2013, EUR 3.2 billion in 2014, rising to EUR 3.8 billion in 2015 and EUR 3.9 billion in 2016. For 2016, this corresponds to a share of around 1.4% of the total revenue from energy taxes in the EU.

Germany recorded the largest tax revenue from emission permits in the EU (more than EUR 1 billion in 2016), followed by the United Kingdom, Italy and Spain, all with revenue above or close to EUR 0.4 billion (see Figure 2). Lithuania and Greece have not recorded tax revenue from emission allowances so far.

Figure 2: Total tax revenue from auctioning of emission allowances as reported by Member States, 2013-2016 (million EUR) - Source: Eurostat (National tax lists)

Environmental tax revenue in Europe in 2016

In 20 EU-countries environmental taxes represent more than 6% of total taxes and social contributions

The weighted average of environmental taxes as a ratio of total taxes and social contributions is 6.3% for the EU-28. This ratio varies significantly across the EU countries (see Figure 3). For 19 EU countries, the share was larger than the EU average in 2016, although it accounted for more than 10% in only two EU countries: Latvia (11.7%) and Slovenia (10.6%). The share was also comparatively high (more than 10%) in Serbia (11.7%). Conversely, Luxembourg (4.6%), Germany (4.8%), France (4.9%), Belgium (5.0%) and Sweden (5.1%) had the lowest shares of environmental taxes.

With few exceptions, countries with a high share of environmental tax revenue in TSC also tend to have relatively high environmental tax-to-GDP ratios. This observation does not hold for EU countries that operate large mandatory social security systems, levying social contributions that are counted as part of TSC, and significantly increasing this revenue compared to countries that have a lower tax burden for social security. For instance, even though Denmark is 10th among EU countries based on the value of environmental tax-to-TSC ratios, relative to its GDP, it collects the largest share of environmental taxes in the EU-28 (4.0% in 2016).

Figure 3: Environmental taxes, % of tax and social contributions and GDP, 2016 - Source: Eurostat (env_ac_tax)

Environmental tax revenue in European countries – a comparison

When comparing the distribution of the different tax types across countries in 2016 (see Figure 4), there are some key differences.

For all countries, energy tax revenue accounts for more than half of total environmental tax revenue, with the share greater than 90% for the Czech Republic, Luxembourg and Lithuania. In Luxembourg, this high proportion can be explained by a very large tax base which is boosted by the high volumes of road fuels sold to non-residents.

The share of transport taxes – more than one third of environmental tax revenue – is relatively high in Malta (40.8%), Denmark (39.5%), Ireland (37.8%) and Austria (36.0%). The share of pollution and resource taxes in 2016 was greater than 10% in only three countries: Hungary (14.0%), the Netherlands (13.6%) and Estonia (10.1%).

For non-EU countries that report environmental tax data, the share of energy tax revenue is particularly high in Serbia (at around 85%), and relatively high transport tax revenue is collected in Norway (40.3%), Switzerland (39.8%) and Turkey (33.5%).

Figure 4: Environmental tax revenue by type, 2016 (% of total environmental tax revenue) - Source: Eurostat (env_ac_tax)

Figure 5 shows how environmental taxes evolved in relation to TSC in 2002-2016. Countries are grouped and sorted by the change in the environmental tax revenue-to-TSC ratio between 2002 and 2016. Those with the largest relative increases in environmental tax revenue-to-TSC ratios (ranging from 2.5 to 4 TSC percentage points) are presented in the top left part, while those with the largest relative decreases (ranging from 2.5 to 3.2 TSC percentage points) can be found in the bottom right part of Figure 5.

Many eastern European countries have reported an increase in the environmental tax revenue-to-TSC ratio since 2002. Latvia, Greece and Estonia are the EU countries with the largest positive change in environmental tax revenue. In particular, Latvia moved towards a greener taxation system, increasing the share of environmental taxes in TSC by 4.0 percentage points, from 7.7% in 2002 to 11.7% in 2016, the largest increase in the EU-28. The positive change in the share of environmental taxes in TSC in Latvia is also related to the increase in revenue from a fee on the "mandatory procurement public service obligation" which is classified as an energy tax. Since 2002, Greece has introduced three new environmental taxes which have helped boost tax revenue. In Estonia, fuel excise duties almost quadrupled between 2002 and 2016.

On the other hand, Lithuania, Luxembourg and Iceland have observed large decreases in the environmental tax share of TSC since 2002. In Lithuania, the share fell from 9.7% to 6.5%, in Luxembourg from 7.1% to 4.6%, while Iceland observed a decrease from 6.3% in 2002 to 3.2% in 2016.

In 16 countries, the environmental tax revenue-to-TSC ratio remained at a fairly constant level, with the change observed between 2002 and 2016 less than 1 TSC percentage point (ranging from -0.95 to + 0.81).

Figure 5: Environmental tax revenue, 2002 - 2016 (% of TSC) - Source: Eurostat (env_ac_tax)

Main drivers behind the evolution in environmental taxes

This section focuses on how environmental tax revenue has evolved and on its main components - energy taxes and transport taxes - compared to recent developments in the EU economy as a whole and the key related economic and fiscal indicators.

Figure 6 outlines the trend in GDP, total tax revenue, energy taxes, transport taxes and pollution/resource taxes from 2002 to 2016. The values are all indexed for comparability.

The financial crisis reversed the upward trend in economic aggregates observed in 2002-2007/8. Energy and transport tax revenue together with total environmental tax revenue had already fallen in 2008, while GDP, total revenue from taxes and contributions and pollution and resource taxes still grew, albeit very slightly in that year, and only fell sharply in 2009.

Following the financial crisis, the economy recovered in 2010, and growth of between 4.0% and 5.2% was recorded in this year for all indicators presented in Figure 6. In 2002-2016, GDP increased by 43% with total tax revenue up by 49%.

Looking closer at the three types of environmental taxes - energy taxes, transport taxes and pollution/resource taxes - there are slight differences in volatility. The growth of energy taxes outperformed the growth of transport taxes (up to 2003) and that of pollution and resource taxes (up to 2006, and again in 2016) only for a very short period. Transport tax revenue increased at a faster pace than other types of taxes, recording an overall rise of 40.6% between 2002 and 2016. Over the same period, energy taxes rose by 37.2% and pollution and resource taxes by 36.0%. In 2016, the growth of all economic aggregates presented in Figure 6 slowed slightly, while revenue from pollution and resource taxes even decreased over this one-year period.

Figure 6: Development of GDP, total tax revenue, energy tax revenue and transport tax revenue, 2002 - 2016 (index 2002=100) - Source: Eurostat (env_ac_tax) (nama_10_gdp)

Evolution in energy taxes and the implicit tax rate (ITR) on energy

EU-28 energy tax revenue in% of GDP dropped by 4% in 2002-2016 (see Figure 7). Most of this decrease occurred in 2003-2008, when GDP grew at a faster pace than energy tax revenue.

There are several possible reasons for the decoupling of the growth rates for energy tax revenue and GDP in the EU-28.

Figure 7: Energy taxes, GDP and final energy consumption, EU-28, 2002-2016 (index 2002=100) -Source: Eurostat (env_ac_tax) (nrg_100a) (nama_gdp_k)

Energy intensity is the ratio between the gross inland consumption of energy and (GDP) for a given calendar year (see Figure 8). The gross inland consumption of energy is calculated as the sum of the gross inland consumption of five energy types: coal, electricity, oil, natural gas and renewable energy sources. Following the financial crisis, GDP has been gradually increasing since 2009, while energy intensity has continued on a downward path until 2016.

Figure 8: Gross inland energy consumption, energy intensity and GDP, 2002-2016 (index 2002=100) - Source: Eurostat (nrg_100a) (nama_gdp_k)

The switch towards renewable energy may have eroded the tax base as renewable energies (for example biofuels) are often taxed less or are completely exempt from taxation.

It would have been possible to balance the erosion of the tax base by increasing energy tax rates. However, following the financial crisis governments may have been reluctant to increase tax rates or introduce new taxes on energy products.

In recent years, governments have also started to put in place mechanisms other than taxes to lower energy consumption (e.g. energy saving programmes).

The ITR on energy is defined as the ratio between energy tax revenue and final energy consumption calculated for a calendar year. Energy tax revenue are measured in euro (deflated) and final energy consumption in TOE (tonnes of oil equivalent). The ITR on energy is therefore measured in EUR per TOE.

Given the ongoing decrease in energy consumption and an overall rise in energy tax revenue in recent years, the ITR on energy for the EU-28 increased between 2005 and 2016 from 193.9 to 234.8 EUR per TOE (see Figure 9). The ITR and its changes vary significantly across the EU countries. The highest level of ITR in both 2005 and 2016 as well as in 2005 was in Denmark (almost double the ITR for the EU-28) with the lowest in Bulgaria (less than half of the EU-28 level). The real burden of taxation on energy increased in 2016 from 2005 levels in nearly all EU countries (with the highest increase of 142% in Greece), except for Luxembourg, Germany, Austria and Sweden where it decreased.

Figure 9: Implicit tax rate on energy (deflated), 2005-2016 (EUR per TOE) - Source: Eurostat (ten00120)

Evolution of transport taxes

Transport taxes are levied mainly on vehicles when they are sold (e.g. sales taxes) and then for each year they are licensed for use on the road (e.g. circulation tax). As a result, the revenue from transport taxes tends to follow the dynamics of the vehicle stock and of vehicle sales. Overall, as illustrated in Figure 11, the stock of passenger cars, goods vehicles and buses and coaches experienced minimal growth in 2002-2016, even though it seemed to have recovered after the financial crisis (from 2009 onwards).

Passenger car sales in the EU-28 slowed down in particular from 2007-2013 (see Figure 10). In countries with high car sales taxes, the economic downturn impacted on car sales and therefore on revenue from such taxes. However, demand started to pick-up again from 2014, almost reaching pre-crisis levels.

Figure 10: Transport tax revenue and new vehicle registrations (passenger cars), EU-28, Index 2002, 2002-2016 - Source: Eurostat (env_ac_taxind2) (road_eqr_carmot)

These two factors might partly explain the reduction in transport tax revenue after 2007 and the gradual recovery since 2009 (see Figure 10).

Figure 11: Transport tax revenues and vehicle stock (passenger cars, buses and motor coaches, goods vehicles), EU-28, 2002-2016 (index 2002=100) - Source: Eurostat (env_ac_taxind2) (tran_r_vehst)

Who pays energy taxes ?

Eurostat collects data on environmental tax revenue (by type – energy taxes, transport taxes, pollution and resource taxes) broken down by economic activity (tax payer). These detailed data become available later than the overall revenue data. The last reference year for which data is available is therefore 2015. The share of energy taxes in the total revenue from environmental taxes differs widely across countries, and this needs to be taken into consideration to properly evaluate the tax burden by tax payer in the EU countries (see figure 12).

Energy taxes levied in the EU-28 on resident companies and households accounted for almost 98% of total energy tax revenue, compared to 2% collected from non-residents.

On average, the share of energy taxes payable by companies (51.9%) was slightly larger than the contribution from households (45.7%). Companies in the mining and manufacturing sectors together with electricity and water suppliers (18.1%) as well as trade, transportation and storage (17.8%) were the main payers of energy taxes in the EU, followed by service providers (10.4%). The farming and construction sectors made relatively low contributions (less than 3% at EU-level).

The share of energy taxes levied on households largely exceeded the EU-28 average in Cyprus (64.8%), Slovenia (62.2%), France (56.9%), Denmark (56.8%) and the Netherlands (54.9%). In Switzerland, the majority (52.3%) of energy taxes was also collected from households. On the other hand, households' contribution to energy tax revenue was very low – less than 15% - in Luxembourg (8.0%) and Malta (13.5%), these are the two countries where non-residents paid the greatest share of total energy tax revenue - 59.6% in Luxembourg and 45.5% in Malta - mainly in the form of excise duties or levies on mineral oil or petroleum.

Figure 12: Energy taxes by paying economic activities, 2015 (%) - Source: Eurostat (env_ac_taxind2)

Who pays transport taxes ?

In 2015, transport taxes payable by households accounted for 66% of total transport taxes levied in the EU-28 on average, while the share of transport taxes collected from companies amounted to 31% (see Figure 13). Households are the main payers of vehicle registration taxes given the large number of vehicles owned by households (largely exceeding the number of vehicles owned by companies), and (partial) exemptions from the motor vehicle registration tax are granted to businesses in some countries. In Austria (80%), Croatia and Spain (78%), Ireland (77%) and Italy (75%), households paid at least three quarters of transport tax revenue. The share levied on households was also high in Turkey (78.7%). Conversely, in Slovakia no transport tax is collected from households and the transport taxes paid by households in the Czech Republic are very low (accounting for less than 1% of the total). There is a relatively low level of transport taxes (albeit significantly larger than in the two extreme cases of Slovakia and the Czech Republic) in Lithuania, Estonia, Bulgaria and Malta, where the share of transport taxes collected from households accounted for less than 50% of total transport taxes. The share is comparatively low in the Republic of Serbia.

Within the corporate sector, the largest share of transport taxes (14%) was collected in the EU-28 from service providers (other than from the transport, storage and trade sector) . Contributions from the transport and storage sector and from the wholesale and retail trade sector accounted for 6% and 4% of total transport tax revenue, respectively. However, in some countries a much larger share (far greater than the EU-28 average) of transport taxes was levied on companies in the wholesale and retail trade sector as well as in the transport and storage sector. For both sectors together, this was the case in Slovakia (57%), Lithuania (44 %) and Latvia (32%) .The share of transport tax revenue payable by the agriculture, manufacturing and construction sectors was low in general, with some exceptions noted in the Czech Republic and Slovakia (with the three sectors accounting for more than 30% of the total). The three sectors together had a very low share (less than 5% of all transport tax revenue) in the Netherlands, Luxembourg, Spain and Denmark.

Figure 13: Transport taxes by paying economic activities, 2015 (%) - Source: Eurostat (env_ac_taxind2)

Who pays pollution taxes ?

On average, the pollution tax burden in the EU-28 was shared almost equally between companies, (51%), and households (48%) in 2015. However, there were considerable differences between EU countries. In Slovenia (94%) and the Netherlands (76%), over three quarters of total pollution tax revenue is levied on households. The proportion of pollution taxes payable by households is also relatively high in the following EU countries: France (70%), Ireland (64%), Portugal (57%) and Belgium (52%). Outside the EU, larger shares of pollution taxes are also collected from households in Norway (80%) and Serbia (51%) (see figure 14).

On the other hand, in 7 EU countries (Bulgaria, Spain, Latvia, Lithuania, Austria, Slovakia and the United Kingdom), pollution taxes are solely levied on companies. This is also the case in Turkey. Apart from that, the majority of pollution tax revenue is also collected from companies in Malta (98%) and Estonia (97%).

The largest portion of pollution tax revenue payable by companies (28%) is levied on the industrial and construction sector, followed by service providers (other than wholesale and retail trade, transportation and storage), whose share accounts for 14% of the total. However, there are large variations in the distribution of the pollution tax burden by industry sector across the reporting countries. Pollution taxes payable by the industry and construction sectors exceeded three quarters in Slovakia (95%), Estonia (94%), Spain (89%), Sweden (85%) and Finland (77%). In Turkey, the industrial sector alone accounts for 97% of total pollution tax revenue. In these countries, there is often one major pollution tax (e.g. a tax on specific emissions or residuals that are released by manufacturing industries) that explains the high share of pollution tax burden concentrated on one or two industry branches. Pollution taxes levied on farmers were generally low, except in Denmark (with contributions from the agriculture sector accounting for 16%) and in Sweden (11%).

Figure 14: Pollution taxes by paying economic activities, 2015 (%) - Source: Eurostat (env_ac_taxind2)

Who pays resource taxes ?

In 2015, 22 EU countries and also Norway, Serbia and Turkey levied resource taxes. Overall, resource taxes payable by companies in the EU-28 accounted for 59%, while resources taxes collected from households accounted for 40% (see figure 15).

Nearly half of total resource taxes levied in the EU were collected from companies in the industrial and construction sectors. These branches of industry accounted for 100% of total resource tax revenue in Cyprus, Romania and Sweden, and for over 90% in Belgium (99%) and the United Kingdom (94%). In a number of countries, there is only one resource tax levied on one specific branch of industry, for instance the tax on gravel in Sweden (payable solely by the mining and quarrying sector).

In Austria, Hungary and Finland, only households pay resource taxes. Moreover, households are the main payers of resource taxes in six EU countries: Denmark (74%), Luxembourg (64%), the Netherlands (63%), France (60%), Portugal (57%), Ireland (53%); the same goes for Serbia (76%).

Figure 15: Resource taxes by paying economic activities, 2015 (%) - Source: Eurostat (env_ac_taxind2)

Source data for tables and graphs

Data sources

Eurostat uses Table 9 from the ESA transmission programme to gather data on environmental tax revenue for four categories of environmental taxes (energy, transport, pollution and resources). It also collects data on environmental taxes at a more detailed level, by economic activity. A Eurostat publication entitled ‘Environmental taxes - a statistical guide’ constitutes the methodological basis; statistics on environmental taxes are based on Regulation (EC) No. 691/2011 (Annex II) on European environmental economic accounts as amended by Regulation (EU) 538/2014, as well as on legal acts in the area of national accounts. Data transmission became obligatory in September 2013. Prior to this, Eurostat collected the data on a voluntary basis.

Data relating to environmental taxes can be used to analyse the revenue stream from such taxes, as well as provide a relative measure of the importance of these taxes by calculating ratios relative to GDP or the total revenue from all taxes and social contributions. In the first case, the comparison helps to provide an understanding of the tax burden. In the second case, the comparison helps assess whether or not there is a shift towards environmental taxes - in other words, shifting the tax burden from other taxes (for example those on labour income) towards environmental taxes.

Environmental tax revenue can also be allocated according to the different economic activities that pay the taxes. Eurostat collects data on environmental taxes using a breakdown by economic activity (NACE Rev. 2 classification) supplemented by information for households, non-residents and a category not allocated.

Rising revenue from environmental taxes should be interpreted with caution. The increases may be caused by the new taxes or an increase in tax rates, or may be linked to an increase in the tax base.

Context

Economic instruments for pollution control and natural resource management are an increasingly important part of environmental policy in the EU countries. These include among others environmental taxes, fees and charges, tradable permits, deposit-refund systems and subsidies.

Environmental taxes have been increasingly used to influence the behaviour of economic operators, whether producers or consumers. The EU has increasingly favoured these instruments because they provide a flexible and cost-effective means for strengthening the 'polluter-pays' principle and for achieving environmental policy objectives.

Environmental policy aims to achieve environmental and sustainable development goals. Policy makers use incentive-based tools to ensure that environmental solutions are found at the lowest cost, to correct externalities and/or raise revenue for specific purposes.

The environmental tax revenue measured as share of the all taxes and social contributions is an indicator to help assess progress towards 'greening' the taxation system. Part II of the Working Paper on the Roadmap to a Resource Efficient Europe recommends that 10% of taxes and social contributions in the EU are environmental taxes by 2020. This indicator reflects a certain degree of internalisation of environmental impacts in the national economies.

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Notes

  1. excluding imputed social contributions