Tax policy analysis

Revenue Statistics tax to GDP ratio changes between 2007 and provisional 2012 data

 

New OECD data in the annual Revenue Statistics publication show that tax revenues as a percentage of GDP continue to recover gradually from the falls in almost all countries in 2008 and 2009 that stemmed from the financial and economic crisis. The average tax to GDP ratio in OECD countries was 34.6 per cent [1] in 2012 compared with 34.1 per cent in 2011 and 33.8 per cent in 2010. This is still below the most recent peak year of 2007 when tax revenues to GDP ratios averaged 35.0 per cent (Table A, Table 2)

  • Denmark had the highest tax to GDP ratio in 2012 (48.0 per cent) and Mexico the lowest (19.6 per cent).
  • Of the 30 countries for which data for 2012 are available the ratio of tax revenues to GDP compared to 2011 rose in 21 and fell in only 9.
  • Between 2011 and 2012, the largest tax ratio increases were in Hungary (1.8 percentage points explained by both taxes on goods and services and taxes on income) and in Greece (1.6 primarily due to higher taxes on income as a percentage of GDP).  Other countries with substantial rises in their tax to GDP ratio between 2011 and 2012 were Italy and New Zealand (1.4 percentage points), Belgium, Iceland and France (1.2).
  • The largest fall in the tax ratio between 2011 and 2012 was in Israel with a decline of one percentage point from 32.6 per cent to 31.6 per cent, driven largely by a reduction in taxes on goods and services as a share of GDP.  Portugal and the United Kingdom showed falls of 0.5 percentage points.
  • Compared with 2007 (pre-recession) tax to GDP ratios, the ratio in 2012 was still down by more than three percentage points in four countries (Iceland , Israel, Spain and Sweden).  The biggest fall has been in Israel, from 36.4 per cent in 2007 to 31.6 per cent of GDP in 2012.
  • The tax burden in Turkey increased from 24.1 per cent to 27.7 per cent between 2007 and 2012.  Four other countries (Belgium, France, Luxembourg and Mexico) showed increases of more than 1.5 percentage points over the same period. 

 

The latest year for which tax to GDP ratios are based on final revenue data and available for all OECD countries is 2011 (Chart A). These data show that tax ratios vary considerably across countries.

  • In 2011, Denmark had the highest tax to GDP ratio (47.7 per cent), followed by, Sweden, Belgium and France.
  • In contrast, ten countries - Australia, Chile, Ireland, Japan, Korea, Mexico, the Slovak Republic, Switzerland, Turkey and the United States - had tax ratios of below 30 per cent.
  • Mexico had the lowest ratio at 19.7 per cent followed by Chile at 21.2 per cent.
  • The tax ratio in the OECD area as a whole (un-weighted average) rose by 0.3 percentage points from 2010 to 34.1 per cent in 2011. (Table A).
  • Relative to 2010, overall tax ratios rose in 24 OECD member countries and fell in 9.
  • The largest increases in the ratio were in Portugal (1.8 percentage points), Chile (1.7) and Turkey (1.6).
  • Four other countries – the Czech Republic, Finland, France and Japan – saw increases of one percentage point or more between 2010 and 2011.
  • The largest reductions were in Estonia (1.7 percentage points), Sweden (1.2) and Slovenia (1.0).

 

The key changes in the tax to GDP ratio of the main tax headings between 2010 and 2011 were as follows:

  • Revenues from taxes on income (personal and corporate income taxes together) as a percentage of GDP increased from 11.2 per cent in 2010 to 11.4 per cent in 2011 on average. Ireland reported the largest increase (1.5 percentage points) and four other countries (Australia, Chile, Portugal and the United States) saw this ratio increase by at least one percentage point.  Hungary reported the largest fall in this ratio (by 1.7 percentage points of GDP).  No other country reported a fall of more than one percentage point (Table B).
  • The corresponding ratio for social security contributions remained steady at 9.1 per cent of GDP in both 2010 and 2011 (Table 13).
  • Ratios were essentially unchanged for both payroll taxes (0.4 per cent of GDP in both years) and property taxes (1.8 per cent of GDP in both years) (Table 19 and Table 21).
  • The ratio of taxes on goods and services to GDP remained steady at 11.0 per cent in both years (Table 23).

Aggregate tax ratios often figure prominently in policy debates and they are sometimes linked directly to the economic performance of nations.  A special feature included in section S.2 of the 1999 edition of this Report explained why figures on tax revenues measured as a percentage of GDP should generally be interpreted with caution.  More specifically, the revised guidelines set out in the 1993 System of National Accounts (SNA) that have been used to estimate the value of GDP for all OECD countries since the mid 1990’s, generally resulting in higher GDP levels.  As a consequence, revised tax ratios reported are typically one half to over two percentage points lower than tax to GDP ratios before these revisions.  To limit any distortionary impact, the present edition of the Report employs revised GDP estimates for 1970 and later years in those cases where OECD countries have not reported revised GDP figures.  The impact of GDP revisions is considered in greater detail in the “Methodology issues” page.



[1] Calculated by applying the unweighted average percentage change for 2011 in the 29 countries providing data for that year to the overall average tax to GDP ratio in 2010.

 

Downloadable tables/figures 

Chart A. Total tax revenue as percentage of GDP

Table A. Total tax revenue as percentage of GDP

Table B. Taxes on income and profits as percentage of GDP

Table 2. Total tax revenue as percentage of GDP, 1965-2010

Table 5. Tax revenue of main headings as percentage of GDP, 2010

Table 7. Taxes on income and profits (1000) as percentage of GDP

Table 9. Taxes on personal income (1100) as percentage of GDP

Table 11. Taxes on corporate income (1200) as percentage of GDP

Table 13. Social security contributions (2000) as percentage of GDP

Table 15. Employees’ social security contributions (2100) as percentage of GDP

Table 17. Employers’ social security contributions (2200) as percentage of GDP

Table 19. Taxes on payroll and workforce (3000) as percentage of GDP

Table 21. Taxes on property (4000) as percentage of GDP

Table 23. Taxes on goods and services (5000) as percentage of GDP

Table 25. Consumption taxes (5100) as percentage of GDP

Table 27. Taxes on general consumption (5110) as percentage of GDP

Table 29. Taxes on specific goods and services (5120) as percentage of GDP

Table 38. Estimates of tax revenues as percentage of GDP, 2011


How to obtain this publication

Readers can access the full version of Revenue Statistics 1965-2012, 2013 Edition as follows:

 

Back to the Revenue Statistics homepage

 

 

 

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