What is this graph saying?
The tax increase is first measured in dollars. Since the dollar amounts are large, and not comparable across countries, they divide by the size of nominal GDP. This is standard practice in discussing macroeconomic policy. This way, we can quickly judge the relative size of a quantity without having to run to an economic database to see statistics on the size of the economy.

In this case, they are looking at a tax increase that is assumed to equal 1% of nominal GDP. That is, if nominal GDP were \$100 billion, that is a tax increase of \$1 billion.