The European Commission published the 2021 Annual Report on Taxation, a yearly review of Member States’ tax policies and their contribution to the priorities of the EU. The report finds that annual tax revenue in the EU was stable in 2019 across Member States, with slight reductions in the average tax burden on labour and corporate tax.

The annual report outlines that Member States have continued to introduce new tax measures to support innovation and productivity, address the corporate debt bias and reduce the time it takes to comply with taxes.

The report found that while environmental taxation can be a useful policy tool to help achieve climate and environmental policy goals and contribute to economic recovery, the report shows that it is still underused in many Member States. Several EU Member States have raised taxes on tobacco, alcohol, and soft drinks to improve public health.

The report also pointed out that the COVID-19 pandemic forced Member States and the EU to react with an unprecedented range of measures, including tax measures and direct support for households, businesses and the health sector.