A new analysis of the fiscal systems of countries within the Organisation for Economic Co-operation and Development (OECD) has revealed a massive gap in tax approaches. Last year’s data show that the share of tax revenue in relation to Gross Domestic Product (GDP) varies dramatically from country to country, reflecting profound differences in economic models and social priorities.
At the top of the ranking are countries traditionally associated with robust social support. France, Denmark, and Italy have reinforced their status as high-tax states, with tax collections exceeding an impressive 40% of GDP. The main sources of revenue for these countries are taxes on personal income, corporate profits, and capital gains. Equally significant are contributions to social insurance funds and indirect taxes on goods and services, such as VAT. This model enables them to fund an extensive system of public services, including universal healthcare, education, and social benefits.
Spain holds a steady position among countries with medium to high fiscal pressure. This reflects the nation’s effort to balance the principles of a European welfare state with the need to maintain economic competitiveness. A large share of the budget comes from income tax and mandatory social contributions, underscoring the significance of the public sector. Consumption taxes also make a substantial contribution to state revenue, a feature typical of many developed European economies. Spain’s ranking shows the country sits somewhere between the Scandinavian model and more liberal approaches.
At the other end of the spectrum are countries where the tax burden is much lower. Notable examples include Mexico and Japan, whose tax collections don’t even reach 15% of GDP. This group also includes Chile, Ireland, Colombia, Turkey, and Costa Rica, where tax revenues remain below 25%. Such policies are typically aimed at encouraging private investment and business activity by lowering fiscal pressure. However, the flip side is often limited funding for public goods, which affects infrastructure quality, access to healthcare, and the level of social protection for citizens.
Thus, the latest OECD data offers more than just dry statistics—it illustrates the broader global debate about the role of the state in the economy. The diversity of approaches shows that there is no universal formula for success, and every country seeks its own balance between economic growth and social equality.
