Tax policy analysis

Revenue Statistics tax to GDP ratio changes to 2012

 

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 2012. (Chart A)

  • In 2012, Denmark had the highest tax to GDP ratio (47.2%), followed by France, Belgium and Finland.
  • In contrast, eleven countries - Australia, Chile, Ireland, Israel, Japan, Korea, Mexico, the Slovak Republic, Switzerland,Turkey and the United States - had tax ratios of below 30%.
  • Mexico had the lowest ratio at 19.6% followed by Chile at 21.4%.
  • The tax ratio in the OECD area as a whole (unweighted average) rose by 0.4 percentage points from 2011 to 33.7% in 2012 (Table A).
  • Relative to 2011, overall tax ratios rose in 26 OECD member countries, fell in 7 and remained unchanged in 1.
  • The largest increases in the ratio were in Hungary and New Zealand (1.6 percentage points) and Italy (1.4).
  • Four other countries – Belgium, France, Greece and Italy – saw increases of more than one percentage point between 2011 and 2012.
  • The largest reductions were in Israel (1.2 percentage points), and Portugal (0.8).

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% in 2011 to 11.4% in 2012 on average. The largest increases were in New Zealand (1.5 percentage points) and Greece (1.2). Twenty-three other countries saw this ratio increase but by less than one percentage point. Portugal and the United Kingdom reported the largest falls in this ratio (by 0.6 percentage points of GDP) (Table B).
  • The corresponding ratio for social security contributions remained steady at 8.9-9.0% of GDP in both 2011 and 2012 (Table 13).
  • Ratios were essentially unchanged for both payroll taxes (0.4% of GDP in both years) and property taxes (1.7-1.8% of GDP in both years) (Table 19 and Table 21).
  • The ratio of taxes on goods and services to GDP remained steady at 10.8% 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 2008 System of National Accounts (SNA) that have been used to estimate the value of GDP for 29 of the 34 OECD countries, have resulting in higher GDP levels. As a consequence, the revised tax ratios reported in this publication are lower than tax to GDP ratios before these revisions. To limit any distortionary impact over the reporting period, the present edition of the Report employs revised GDP estimates for 1965 and later years in those cases where OECD countries have not reported revised GDP figures. The scale of the 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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