Explain why it may be necessary to levy different taxes in an economy?/purpose of taxation/roles of taxation
- To raise revenue by exploiting all potential taxable avenues base
- To protect domestic industries for cheap imports
- To reduce income inequality by taxing the rich more than the poor.
- To protect peoples health by charging heavily harmful products such as tobacco to reduce consumption.
- To improve on the country’s balance of payments position by discouraging imports and encouraging exports
- To discourage damping into the country and promote local production through lower taxes on domestic firms
- To encourage growth of major sector like education and health by imposing low taxes.
- To break monopoly powers especially land monopoly to encourage land sale to landless.
- To protect the scarce resource; like forest and mineral from over exploitation.
- To reduce inflation through direct taxes on income
- To control economic variables like employment, saving, investment, saving, etc.
- To redistribute wealth from the rich to the poor.
- To solve environmental problems created by consumption of some goods such pollution from gasoline.
CATEGORIES Economics
TAGS Dr. Bbosa Science
