This necessitates broadening the tax base and enhancing the tax-to-GDP ratio, which shows the tax revenue collected by the government as a percentage of the GDP. The ideal situation is when the tax-to-GDP ratio ranges between 25 percent to 50 percent. A cursory glance at the tax-to-GDP ratio of the countries across the globe reveals that the states which are considered to be developed and welfare states, owe their status to a higher tax-to-GDP ratio. Even Kenya, the least developed country of East Africa, has a tax-to-GDP ratio of 18 percent. The economy is surely moving in the right direction.

Source: Pakistan Today January 28, 2020 16:52 UTC