The purpose of this article was to identify the relationship between cultural patterns and the level and structure of tax revenues and public expenditures. The study was conducted in two stages. In the first stage, the cultural pattern was identified based on Hofstede’s classification using Ward’s clustering method on a sample of 29 EU and EFTA countries. This resulted in the formation of five groups of countries sharing similar levels of Hofstede’s cultural dimensions. These groups were then compared using variables describing the level and structure of tax revenues and public expenditures. The results confirmed that groups formed based on cultural patterns are also characterized by similar levels and shares of selected tax revenues and public expenditures. The regression analysis revealed the extent to which various public expenditures and tax revenues could be explained by different cultural dimensions. These findings underscore the significant role of long-term orientation, uncertainty avoidance, and indulgence/restraint in differentiating the structure of tax revenues. A 1% increase in the individualism index is associated with a 0.686% increase in tax revenues, while a 1% increase in the long-term orientation index corresponds to a 0.717% increase in the share of indirect taxes and a 0.340% increase in the share of income taxes. Similarly, a 1% increase in the uncertainty avoidance index is linked to a 0.164% increase in tax revenues and a 0.298% increase in the share of indirect taxes. At the same time, the dimensions of individualism/collectivism, uncertainty avoidance, masculinity/femininity, restraint/indulgence, and power distance are important in differentiating the structure of public expenditures. The dimension of individualism is particularly strongly associated with the level of public expenditures (a 1% increase in the index is linked to a 0.655% increase in public spending) as well as the share of specific expenditure categories (a 0.375% increase in the share of classical expenditures, a 0.340% increase in the share of expenditures on economic affairs, a 0.364% increase in the share of expenditures on human capital, and a 0.740% increase in the share of social expenditures). These results indicate that cultural patterns may significantly influence tax and expenditure policies in EU and EFTA countries, potentially leading to challenges in implementing a uniform fiscal model within the European Union.

Keywords: Cultural pattern, fiscal policy, public expenditures, tax revenues