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 2010. (Chart A)
- In 2010, Denmark had the highest ratio (47.6%) with one other country, Sweden, over 45%.
- 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 18.8% followed by Chile at 19.6%.
- In 2011, Denmark had the highest ratio (48.1%) and Mexico the lowest (19.7%).
In 2010, the tax ratio in the OECD area as a whole (un-weighted average) rose by 0.1 percentage points to 33.8 per cent (see Table A).
- Overall tax ratios rose in seventeen OECD member countries and fell in the other seventeen.
- The largest increases in the ratio were in Chile (2.5 points) Mexico and Spain (both 1.4 points).
- Three other countries – Iceland, Israel and Turkey – saw increases of more than one percentage point.
- The largest reductions were in Hungary (2.0 points), Estonia (1.5 points) and Germany (1.2 points). Two other countries; Canada and Sweden had reductions of more than one percentage point.
The main changes in the tax to GDP ratio of the main tax headings between 2009 and 2010 were as follows (Table B)
- the OECD average ratio of revenues from personal and corporate income taxes to GDP remained steady at 11.3%. Hungary reported the largest fall in this ratio (by 2.1 percentage points of GDP) and New Zealand was the only other country reporting a fall of more than one percentage point. The country reporting the largest increase was Chile (2.2 points);
- the ratio of taxes on goods and services to GDP rose from 10.7% to 11.0%;
- the corresponding ratio for social security contributions fell from 9.2% to 9.1%;
- there was little change in the average shares levied in the form of payroll taxes and property taxes.
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 (compare columns 2 and 3 of Table G). The impact of GDP revisions is considered in greater detail in the “Methodology issues’ section below.
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 G. The timing of GDP revisions arising from the 1993 SNA/1995 ESA
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