Tax to GDP Ratio by Country 2025

Taxes are a critical part of keeping most countries’ governments and economies functioning properly. But tax burdens can vary dramatically, especially when considered along with the size of an economy, otherwise known as gross domestic product (GDP.)

The tiny Pacific island nation of Nauru has the highest tax-to-GDP ratio at 48.2%, meaning the government collects taxes equivalent to roughly half the nation’s overall economy. Denmark takes second place with 35.5%. Third, fourth, and fifth places aren’t far behind, with Seychelles (31.5%), Lesotho (30.8%), and Kiribati (30.1%.) Among the top ten highest ratios of taxes to GDP, three are in Europe (Denmark, the United Kingdom, and Sweden), three are in Africa (Seychelles, Lesotho, and Namibia), and three are in the Pacific Islands/Australia region (Nauru, Kiribati, and New Zealand), with Barbados representing the Caribbean. These countries achieve these elevated ratios either through having a small economy or by collecting relatively high taxes to fund social services, healthcare, and other programs. The latter is prevalent in Europe, which sees the highest tax-to-GDP ratios of any continent.

Other nations collect just a minuscule fraction of their GDP in taxes. The United Arab Emirates is the world’s lowest at just 0.5%. Iraq collects just 1.3%, and Kuwait just 1.5%. The rest of the bottom 10 sit between 4.2% (Bahrain) and 7.2% (Zimbabwe.) Middle Eastern nations make up much of the bottom ten. Many of these countries enjoy extensive income from state-owned energy companies, allowing them to bill residents next to nothing in taxes while still providing necessary public services. Others may be relatively poor and lack the resources to effectively tax and collect from residents. The United States sits below the global average with a tax-to-GDP ratio of 11.2%, similar to Germany and Malaysia.

In some cases, these ratios should be taken with a grain of salt, primarily due to the lack of recent data for some nations. A few, like Gambia, Guinea, and Niger, only have data from the 1990s or earlier.