What Is Tax-to-GDP Ratio?

The gross national product tax rate refers to the proportion of total national tax revenue to the gross national product in the same period. It indicates that in the total output value of the national economy, the government concentrates the total size of the fiscal through taxation. It is used to study whether the proportion of the national finance in the total output value of the national economy is appropriate and the tax burden between countries Comparison of important comprehensive indicators. Generally speaking, the higher this ratio, the greater the proportion of fiscal concentration; otherwise, the smaller the proportion of fiscal concentration. ^[1]

GDP tax rate

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In the world, indicators such as GDP tax rate, GDP tax rate, and national income tax rate are usually used to compare and analyze the tax burden levels between different countries. The difference is that the calculation of GNP is based on the resident population of a country; the calculation of GDP is based on the borders of a country; and the calculation of national income is based on the new creation of the material production sector Value.

In view of the differences in social systems, productivity development levels, national functions, and fiscal management systems in various countries, further detailed analysis is needed when using indicators such as the gross domestic product tax rate for international tax burden comparisons. Comparing the tax rate of China's gross domestic product with that of western countries requires conversion and reduction. This is because the scope of China's GDP calculation does not include salaries for government employees and military police.