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The OECD Countries' Average Tax Ratio Increases to 34.1% in the Post-Pandemic

Friday, 02 December 2022

The OECD Countries' Average Tax Ratio Increases to 34.1% in the Post-Pandemic

JAKARTA. After the Covid-19 Pandemic, the average tax ratio in member countries of the Organization for Economic Co-operation and Development (OECD) increased to 34.11%.

Meanwhile, in 2020, the tax ratio of OCED countries was only 33.56% on average.

Based on the OECD's 2020 Revenue Statistics report released on 30 November 2022, the increase in tax ratio occurred due to the growth of tax revenues was above the economic growth.

In 2021 the OECD stated tax revenues grew by 12.8%, while economic growth in OECD countries averaged only 10.5%.

Read: Who Benefits The Most from the Global Tax Consensus?

However, the increase in the tax ratio was not evenly distributed in all OECD member countries. The increase only occurred in 24 countries and the tax ratio in 11 other countries decreased.

Meanwhile, the highest tax ratio occurred in Denmark at 46.9% and the lowest tax ratio was in Mexico at 16.7%.

The OECD saw an increase in tax revenue in 2021 in OECD countries due to changes in tax policy made. Unlike 2022, in the second year of this pandemic, the majority of OECD countries issued policies that support economic recovery.

Among other things, by reducing tax incentives for households and businesses. In addition, several countries have also started optimizing revenue sources from digital activities, through the imposition of Value Added Tax (VAT).

Giving back incentives to the community and the business world would only be carried out again towards the end of 2021, due to an increase in energy.



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