RIYADH: The escalating global energy crisis, exacerbated by Russia’s war against Ukraine and the surge in energy prices, has prompted the vast majority of Organization for Economic Cooperation and Development nations to reduce taxes, according to a new report. The recently released “Revenue Statistics 2023” report by the OECD revealed a decline in the average tax-to-gross domestic product ratio in these countries, falling by 0.15 percentage points to 34 percent in 2022. This marked the third such decline since the global financial crisis in 2008-09, with previous decreases observed in 2017 and 2019. In response, 34 out of 36 countries witnessed a decrease in excise tax revenues as a share of GDP, with 21 of them experiencing an absolute decline. Notably, European countries were particularly affected, with declines linked to both reduced energy taxes and lower demand for energy products. The report highlighted that while excise tax revenues decreased, revenues from corporate income taxes increased in more than three-quarters of OECD countries. This uptick was driven by higher profits, especially within the energy and agricultural sectors. Norway saw a substantial rise in CIT revenues, increasing by 8.8 percent of GDP due to exceptional profits in the energy sector. While CIT revenues offset part of the decline in excise taxes, overall tax revenues saw a reduction as a share of GDP in 21 countries, an increase in 14 countries, and remained stable in one. Denmark experienced the most significant decline, with a 5.5 percentage point drop to 41.9 percent, while Korea and Norway observed the largest increases at 2.2 and 1.8 percentage points, respectively. This decline in the OECD’s average tax-to-GDP ratio follows two consecutive years of increases during the COVID-19 pandemic. In 2022, tax-to-GDP ratios ranged from 16.9 percent in Mexico to 46.1 percent in France. A feature in the report delved into the historical analysis of tax buoyancy, revealing that tax revenues generally increased at the same rate as GDP over the past four decades. Notably, CIT revenues proved to be the most buoyant, increasing faster than economic growth, while excise taxes were the least buoyant, growing at a slower rate than GDP.