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. 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.
Even if we leave the comparisons, lets consider Pakistan. If the tax to GDP ratio is doubled, wouldnt that improve the economic situation of the country?