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national debttaxation does not often raise sufficient revenue for the government expenditure so governments resort to borrowing this
types of public debtpublic debts can be classified according to the purpose for which the money was borrowed
public expenditurethe accounts of the central government are centered on two funds the consolidated fund which handles the revenues form taxation and
economic effects of taxationa a deterrent to workheavy direct taxation especially when closely linked to current earnings can act as a serious
digressive taxa tax is called digressive when the higher incomes do not make a due contribution or when the burden imposed on them is relatively
regressive taxa tax is said to be regressive when its burden falls more heavily on the poor than on the rich no civilized government imposes
proportional taxis where whatever the size of income the same rate or same percentage is charged examples are commodity taxes like customs excise
disadvantagesthe effect on incentiveshigh progressive tax makes work and extra effort become less valuablethe effect on the willingness to accept
advantagesa it is more equitable the broader shoulders are asked to carry the heavier
progressive taxa progressive income tax system is one where the higher the income the greater the proportion paid in taxes this is effected by
advantagesa they are less costly to administer because the producers and sellers themselves deposit them with the governmentb if levied on goods with
indirect taxesthese are imposed on an individual mostly producers or traders but they can be passed on to be borne by others usually the final
demerits of direct taxesa heavy direct taxation especially when closely linked to current earnings can act as a serious check to productivity by
merits of direct taxesa they satisfy the principle of equity as they are easily matched to the tax payers capacity to pay once assessedb they
direct taxesa direct tax is one where the impact and incidence of the tax is on the same person eg income tax death or estate duty corporation taxes
classification of taxestaxes can be classified on the basis ofa impact of the taxesit means on whom the tax is imposed on the
principles of an optimal tax systemwhen taxes are imposed certain conditions must be fulfilled these conditions are known as principles or
functions or purposes of taxationthe functions of taxation can be discussed from the activities of the government it is meant to achievethese
types of budgets1 deficit budget if the proposed expenditure is greater than the planned revenue from taxation and miscellaneous
functions of the budgetthe budget fulfils three main functions to raise revenue to meet government expenditurethe government of a country provides
the budgetthe budget is a summary statement indicating the estimated amount of revenue that the government requires and hopes to raise it also
macro-economic policy objectivesthe major macro-economic policy objectives which the governments strive to achieve arei full employmentone of the
the microeconomic objectives of governmentthese are the policies which are concerned with the allocation and distribution of resources to maximize
objectives of governmentgovernment policies are required in market economies to achieve certain goals there are broadly two types of government
supply-side policiessupply-side policies are intended to increase the economys potential rate of output by increasing the supply of factor inputs