‘An environmental tax is a tax whose tax base is a physical unit (or a proxy of a physical unit) of something that has a proven, specific negative impact on the environment, and which is defined in the ESA [European System of Accounts] as a tax’ . This indicator measures environmental tax revenue as a share of total tax revenue, including social contributions, and is calculated by dividing environmental tax revenue by total tax revenue including social contributions.
This indicator is based directly on data published by Eurostat, and the underpinning methodology can be found in Eurostat .
The absolute amount of environmental tax revenue was deflated based on 2010 prices using the Eurostat gross domestic product (GDP) deflator.
This indicator is a headline indicator for monitoring progress towards meeting the objectives of the Eighth Environment Action Programme (8th EAP). It contributes mainly to monitoring progress in relation to aspects of Article 3(v), which requires ‘making the best use of environmental taxation, market-based instruments and green budgeting and financing tools, including those required to ensure a socially fair transition’ . The European Commission communication on the 8th EAP monitoring framework specifies that this indicator should be used to monitor the ‘increase inthe share of environmental taxes in total revenues from taxes and social contributions’ .