From Longman Business Dictionaryeffective tax rateefˌfective ˈtax rate British EnglishTAX the average rate at which someone pays tax on their total income, calculated from the income on which they pay no tax and the income on which they pay tax at a particular rateAmerican Home Products Corp. reported a 12% gain in its earnings as the company benefited from a lower effective tax rate. → rate
