A decrease in tax to GDP ratio of a country indicates: (B) less equitable distribution of national income.
Let's consider why this is the correct answer:
When income is distributed inequitably across a nation, only part of that population's nation will be acting as active taxpayers. Thus, if the nation's GDP increases under these circumstances, the tax collection will still fall short. Over a period of time, this can cause a decrease in tax to GDP ratio. This does not indicate slowing economic growth rate; it simply means that tax revenues are not keeping up with GDP growth. Theoretically, tax revenue should increase as GDP increases.
As the previous educator who answered this mentioned, this decrease in the ratio can also be attributed to other circumstances, like individuals and businesses who owe taxes failing to pay them, tax rates being set too low, and the expanse of poverty (such as in developing countries).