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Taxation and Public Finance

Tax Planning & Tax Management TAXATION

Taxation and Public finance .

The primary purpose of taxation is to raise revenue
to me e t huge public expenditure . Most
governmental activities must be financed by
taxation. But that is not the only goal. In other words,
taxation policy has some non-revenue objectives.
Sincerely speaking, in the modern world, taxation is
used as an instrument of economic policy. It affects
the total volume of production, consumption,
investment, choice of industrial location and
techniques, balance of payments, distribution of
income, e.t.c.  One of the importance of taxation in public finance is
economic development. Economic development of
any country is largely conditioned by the growth of
capital formation. It is said that capital formation is
the kingpin of economic development. But Least
Developing Countries usually suffer from the
shortage of capital.

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