FINANCING OF PUBLIC EXPENDITURE

Public spending is financed through block grants from the Danish government and taxes. The tax burden is calculated as the sum of taxes relative to the GDP. As shown in Figure 1, the tax burden has remained relatively constant since 1986.

Figure 1

Taxes in Per Cent of GDP

Source: Statistics Greenland

The tax structure has not changed much since 1986, as shown in Figure 2. The current income tax is by far the largest item, followed by production and import taxes.

Figure 2

Distribution of Taxes

Source: Statistics Greenland

The annual block grant from the Danish state is DKK 3,5 billion in 2010. This represents approximately 40 per cent of the total revenue. According to the Act on Self-Government which came into force in 2009, this amount is now fixed until Greenland gets income from oil or minerals.