The amount of revenues collected by countries is related to historical and current political decisions regarding the goods and services governments provide and the way that they are produced. For example, if governments provide support via tax breaks, revenue to gross domestic product (GDP) ratios will be lower. In addition, for OECD member countries that are also members of the European Union, the Maastricht criteria include targets for the size of deficits and debts that may affect the size of revenues in any given year.

A country’s revenue structure determines who pays for public services and goods. By spreading revenues across different instruments, countries can distribute the burden across particular groups of citizens and/or sectors of the economy.

Revenue structures and transfers between government levels illustrate the degree of fiscal autonomy of sub-central governments and their ability to shape public policy and public service delivery. These abilities are also affected by a country’s institutional structure; federal states share sovereignty with sub-central governments that, consequently, may have more power to shape public policies.