Regardless of which measure is chosen, the tax burden has shown a slight downward trend since the turn of the millennium. The same is true for the other Scandinavian countries. The OECD average has risen slightly over the same period. The difference between Scandinavia and the rest of the OECD has therefore narrowed somewhat over the past 25 years.
The decline in the tax burden in Norway is primarily due to lower tax revenues, particularly from motor vehicle taxes.
Norway's tax structure differs somewhat from other countries. The state has a relatively low proportion of personal income tax and more corporate tax in its tax structure. When we exclude tax on the petroleum industry, the Norwegian tax structure is more like other countries. Wealth tax, inheritance tax and property tax account for a small proportion of tax revenues in Norway, totaling around 3 percent of the total. This is well below Germany, France, the USA and the OECD average.
We define petroleum-adjusted GNI as gross national income minus value creation in the petroleum industry. When comparing public spending in Norway with other countries, it makes sense to use petroleum-adjusted GNI in the denominator, at least when studying the sustainability of public finances. The reason is that interest and dividend income from the fund should be seen as a stable income stream in line with the normal tax base. This income is included in GNI, but not in GDP. Value creation from the petroleum industry is excluded because it derives from a non-renewable resource.
Some of the public expenditure in Norway related to the Government Pension Fund Global (GPFG) may be excluded when comparing public expenditure with other countries. The GPFG incurs interest and tax costs that can be seen as unavoidable costs associated with having a large fortune, or expenses for income generation. In 2024, these totaled NOK 43.5 billion.
Norway has the highest proportion of people employed in public administration in the OECD. The proportion has changed little since the early 1990s. Some countries with a relatively high tax burden, such as France and Germany, have a much lower proportion of public sector employees than Norway. This is partly because they have a greater proportion of publicly funded health and care services provided by employees in the private or non-profit sector. They spend more on benefits in kind from public budgets than the Nordic countries do. Therefore, government consumption and investment as a share of GDP, or domestic final consumption, should also be considered when assessing the government's participation in the economy. Government consumption as a share of domestic final consumption in France and Germany is now close to the Nordic countries’ levels.
The scope of and ambitions for public services vary widely between OECD countries. This is an important explanation for differences in tax burdens and expenditure levels. Generally speaking, there is a positive correlation between scope, as measured by e.g. the level of public spending, and how satisfied citizens are with public services. Citizens in Norway are among the most satisfied in the OECD with basic public services such as justice, healthcare and education.