Government revenues refer to the income collected by governments from taxes and other revenue sources. In most OECD countries, the primary sources of government revenue are taxes and social contributions, supplemented to a lesser extent by fees for public services. A significant portion of revenue may also come from non-tax sources, such as profits from state-owned enterprises or royalties from natural resources. Public policy for government revenue serves multiple purposes. At its core, it aims to collect the funds needed to finance public goods and services. In addition, many revenue systems are structured to promote equity, for example by taxing higher levels of income or wealth at higher rates. Governments may also use revenue to encourage socially beneficial activities (such as tax breaks on research and development) and discourage harmful ones (such as taxes on carbon emissions or tobacco). However, these various goals may conflict with each other, requiring careful balancing in policy design.
General government revenues across the OECD were on average 37.9% of GDP in 2023 recording a slight increase of 0.4 percentage points (p.p.) from 37.5% in 2019. Norway (63.2%), Finland (53.0%), and France (51.6%) were the countries with the highest revenue-to-GDP ratios in 2023. There is however a wide range in spending levels between OECD countries, with OECD-EU countries tending to have higher share of expenditure, 46.0% on average, compared to the OECD average of 37.5% (Figure 16.1).
Government revenues have on average remained stable between 2007 and 2024 across OECD countries, with only minor fluctuations, from a low of 35.6% of GDP in 2009 following the global financial crisis, to a peak of 39.4% in 2022 in the wake of the COVID-19 pandemic. In 2023, OECD countries have largely returned to pre-pandemic levels of revenue. However, general government revenues have increased since 2019 in Japan (+2.3 p.p.) and the United Kingdom (+2.6 p.p.).
The differences in revenues are more pronounced when measured per capita, due to variations in income levels per capita between countries. For instance, Luxembourg had the highest revenue levels per capita in 2023 (6 5697 USD PPP), despite its revenue-to-GDP ratio being close to the OECD-EU average. Similarly, Ireland had revenue per capita levels above the OECD average in 2023, while being the country with the third lowest revenue-to-GDP ratio the same year. Norway stands out with having both significantly higher revenues per capita and as a share of GDP (Figure 16.3). In 20 out of 37 countries, annual growth of real government revenues per capita was negative between 2022 and 2023, on average -2.6 across OECD countries and -0.8 across OECD-EU countries. (Online Figure J.11.1).
