The tax-to-GDP ratio is a ratio of a nation's tax revenue relative to its gross domestic product (GDP), or the market value of goods and services a country produces. Some countries aim to increase the tax-to-GDP ratio to address deficiencies in their budgets.
Taxes and GDP are generally related. The higher the GDP, the more tax a nation collects. Conversely, countries with lower taxes produce a lower GDP. Analysts, economists, and government leaders can use this ratio to see the rate at which taxes fuel a nation's economy.