Tax policy analysis

Revenue Statistics tax to GDP ratio changes to 2011

 

Tax ratios vary considerably between countries as does their evolution over time.  The latest year for which tax to GDP ratios are available for all OECD countries is 2011. (Chart A)

  • 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.
  • Denmark had the highest tax to GDP ratio in 2012 (48.0 per cent) and Mexico the lowest (19.6 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.

 

 

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


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

 

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