Tax-to-GDP Ratio: Comparing Tax Systems Around the World
Tax-to-GDP Ratio: Comparing Tax Systems Around the World
Taxes are an important source of revenue for most countries. In fact, taxes provide around 50% or more of government funds in almost every country in the world.
How does each country’s tax system compare to one another? This question is tricky to answer. Since countries’ populations and economies differ greatly, measuring total tax revenue is not the best way to compare international tax systems.
Instead, using a tax-to-GDP ratio is one of the more useful ways to compare tax systems around the world.