Corporation tax raises $1.5 trillion a year

All this talk of tax competition, tax planning, tax avoidance, and so on can make one terribly pessimistic. After reading Tim Harford and Michael Devereux both argue that we may as will give up on corporation tax, I got to wondering how much it actually raises. Luckily I had some data to hand, from the USAID ‘Collecting Taxes’ database.

The headline is that, globally, governments raise US$ 1.5 trillion in corporation tax annually, equivalent to 2.5% of World GDP.

The best way to consider developing countries, meanwhile, is I think to take the low and lower middle-income countries, but remove China and India, which between them raise about US$ 200 billion a year. The remainder is $132 billion, which is uncannily similar to the global aid budget.

Not bad, I think!

Corporation tax revenue by income group

Corporation tax revenue by geographical area

The data
Feel free to download and use this yourself. The methodology is a little naughty, in that I worked backwards from corporation tax/GDP ratios and absolute GDP figures to get absolute tax figures. But I did a few spot checks, and it seems to work.