Total tax revenue as a percentage of GDP indicates the share of a country's output that is collected by the government through taxes. It can be regarded as one measure of the degree to which the government controls the economy's resources.
Taxes are defined as compulsory, unrequited payments to general government. They are unrequited in the sense that benefits provided by government to taxpayers are not normally in proportion to their payments. The data on total tax revenue shown here refer to the revenues collected from taxes on income and profits, social security contributions, taxes levied on goods and services, payroll taxes, taxes on the ownership and transfer of property, and other taxes.
Taxes on incomes and profits cover taxes levied on the net income or profits (gross income minus allowable tax reliefs) of individuals and enterprises. They also cover taxes levied on the capital gains of individuals and enterprises, and gains from gambling.
Taxes on goods and services cover all taxes levied on the production, extraction, sale, transfer, leasing or delivery of goods, and the rendering of services, or on the use of goods or permission to use goods or to perform activities. They consist mainly of value added and sales taxes.
Note that the sum of taxes on goods and services and taxes on income and profits is less than the figure for total tax revenues.
The tax revenue data are collected in a way that makes them as internationally comparable as possible. Country representatives have agreed on the definitions of each type of tax and how they should be measured in all OECD countries, and they are then responsible for submitting data to the OECD that conform to these rules.
The tax burden continued to rise in OECD countries in 2012, increasing by 0.5 percentage points to an average 34.6% of GDP. The increase is calculated by applying the unweighted average percentage change for 2012 in the 30 countries providing data for that year to the overall average tax to GDP ratio in 2011. The rate of increase was higher than in 2011 and 2010 when the average tax burdens were 34.1% and 33.8%. Of those 30 countries, the total tax revenues as a percentage of GDP rose in 21 and fell in 9 compared with 2011. However in most cases, changes in the total tax to GDP ratio for countries were very small.
The slow upward trend in this ratio recorded in almost all OECD countries during the 1990s stopped in 2000. Since then, the total tax revenue as a percentage of GDP for all OECD countries has fallen but by less than 1 percentage point.
Revenue collected from taxes on income and profit accounted for 11.4% of GDP on average in 2011. This ratio showed an upward trend in the second half of the 1990s reaching a peak in 2000. After declining slightly in the following years, the average ratio in 2007 rose above the 2000 peak but has now fallen back again.
The OECD average for tax revenues on goods and services has declined by 0.3 percentage point since 2005 but at the same time has been remarkably stable since 1995 at a level of around 11% of GDP.