Field: Governance and social capital

Subfield: Administrative capacity

Details:

This indicator measures the revenues from taxes and social contributions collected by the central public administration and represents the total transfers by the central public administration for the benefit of the community. Specific transfers, such as: fines, penalties and most contributions for social welfare are excluded. It is noteworthy that the desirable level of this indicator (the total taxes and social contributions that should be paid to the state) is unlikely to be reached. Except the Northern states (Sweden, Iceland, Denmark), where the difference between the estimated levels and total collected revenues is of several percentages, all the other European states demonstrate a certain incapacity to collect all due taxes and social contributions. On the other hand, the level of this indicator reflects the state’s policy on taxing (if the state relaxes its fiscal policy by abolishing taxes, this will have an impact on the estimated level of revenues). In 2016, Romania was last among EU Member States (26% compared to EU average of 40%), and in terms of real collection, Romania was second to last, ahead of Lithuania, at 17% (compared to 26%, EU average).