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The Redistributive Impact of Consumption Taxation in the EU: Lessons from the post-financial crisis decade

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Abstract

During the 2010-2019 decade, consumption taxes have risen in the vast majority of the EU Member States as a result of austerity measures, tax shifts as well as taxing transport and housing-related energy consumption. The redistributive impact of these policy changes remains mostly unexplored. In this paper, we provide new empirical evidence on the redistributive effect of changes in VAT and excises over this period, along with other developments in the broader tax-benefit system including tax shift reforms. Our results indicate that the consumption tax systems in the EU have become more unequalizing in most countries as a result of an increase in the tax burden and of its regressivity. While the taxation of transport is the component that has increased the most, the highest inequality impact was driven by the taxation of housing-related energy consumption. Only in a few countries these policy changes were accompanied by an increase in social transfers sufficient to compensate the poorest households.

Suggested Citation

  • MAIER ESSINGER Sofia & RICCI Mattia, 2022. "The Redistributive Impact of Consumption Taxation in the EU: Lessons from the post-financial crisis decade," JRC Working Papers on Taxation & Structural Reforms 2022-10, Joint Research Centre.
    • Handle: RePEc:ipt:taxref:202210
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    File URL: https://publications.jrc.ec.europa.eu/repository/handle/JRC131598
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    2. Cathal O’Donoghue & Beenish Amjad & Jules Linden & Nora Lustig & Denisa M Sologon & Yang Wang & Zeynep Gizem Can, 2025. "The Distributional Impact of Inflation in Pakistan: A Case Study of a New Price Focused Microsimulation Framework, PRICES," International Journal of Microsimulation, International Microsimulation Association, vol. 18(3), pages 102-131.
    3. Ricci, Mattia & Dominguez, Ignacio Perez & Van Houtven, Stijn & Hristov, Jordan & Vandyck, Toon, 2026. "Pricing GHG emissions in agriculture: Accounting for trade and fairness for effective climate policy," Ecological Economics, Elsevier, vol. 239(C).
    4. Michael Masiya & Stephen Hall & Stuart Murray & Rachel Etter‐Phoya & Eilish Hannah & Bernadette O'Hare, 2024. "Tax expenditures and progress to the Sustainable Development Goals," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(6), pages 6144-6162, December.
    5. Siti Nur’amalina Syeddin & Nor Zarina Mohd Salim & Hafini Suhana Ithnin & Noormahayu Mohd Nasir & Zarul Azhar Nasir, 2024. "Goods and Services Tax vs. Sales and Services Tax: Different Structures Impact on the Households’ Expenditure Pattern," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(9), pages 951-963, September.
    6. Julio López Laborda & Carmen Marín González & Jorge Onrubia, 2025. "Observatorio sobre el reparto de los impuestos y las prestaciones entre los hogares españoles. Noveno informe - 2022," Studies on the Spanish Economy eee2025-02, FEDEA.

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    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence

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