Mexico has the lowest tax burden among the most developed economies in the world, according to a recent report from the Organization for Economic Cooperation and Development (OECD) . In its annual report, OECD detailed the tax burdens in place during 2010. The report shows that Mexico has the lowest tax to GDP ratio at 18.7%.
The majority of OECD governments have stabilized the tax burden in place with the tax to GDP ratio. It has increased from 33.8% in 2009 to 33.9% in 2010, according to the OECD data from the annual Revenue Statistics publication. However, these numbers are still down from 2008 and 2007 when the ratios were 34.6% and 35.2%, respectively.
The OECD stressed that the findings show that changes in tax revenues reflect both changes in economic activity and policy measures.
“In those European countries most affected by the financial crisis and subsequent recession there was an initial sharp fall in tax revenues, but then a small recovery in the tax to GDP ratio in 2010,” the OECD stated.
“The data collected also shows that in a period when all levels of government have seen pressure on expenditure and revenues, the average tax ratio for state, regional and local governments has remained steady since 2007 while that for central government has declined,” the OECD explained.