Re: Pakistan loses 7-8 billion rupees daily due to corruption - NAB chief
I don’t really think tax-GDP ratio is comparable across countries. The denominator, GDP is a function of technology and efficiency of the economy. The numerator is a function of taxation policies of the governments. You cannot really compare Tax-GDP ratios across countries and make any meaningful inferences. What you can do is to monitor it for a country across time and see if tax collection has improved over time for that country.
The ratio is also not an indicator of tax evasion either. Again, for a country with huge GDP and little social welfare (USA), the ratio would be lower than a country with greater emphasis on social welfare funded through taxes (United Kingdom). I cannot say that people in USA evade more taxes just because their tax-GDP ratio is much smaller than United Kingdom.