TAX IS A TOOL OF ECONOMIC DEVELOPMENT

Tax is a charge against income of any person. It is the amount of money demanded by the government to support or to provide facilities or to provide specific services, levied on income, property, sales, and so is the collection of taxes by the government, which is used to enhance the lifestyle of its inhabitants, for economic growth and the inhibition of some tributaries of certain income enabled. It also has a positive relationship with good governance practices. People pay taxes to support the government in economic development. It's actually government revenues, and more than half of the government`s revenue comes from the collection of taxes.

Collected taxes play an important role in the financing of public sector activities. These activities are carried out in order to provide the benefit of the general public and to improve their lifestyle. Such as the government is responsible to provide justice and security, employment, education, health, and more importantly the government has to make sure that the basic necessities of life are accessible to every citizen. To manage all of these things the government on the development of institutions that require a large amount of the operation and utilization at full capacity.

No one likes to pay taxes. Usually, people do not like to pay them. Governments do not want to impose. But taxes are necessary both to finance the required public spending in a non-inflationary and also to ensure that the burden of paying for such spending is distributed to some extent. While necessary, taxes impose real costs on society. And seek good tax policy to reduce those costs. (Richard Baird, 2003). Each country earns revenue in different ways. Choosing a country on how to structure its tax system depends on many factors, such as level of development, the need and desire to improve public services, and the ability to collect taxes effectively. Tax policy choices also depend on the preferences of a country in terms of this kind of public policy goals such as achieving a desired distribution of income and wealth and increased growth rate (and perhaps regional) of the national economy.

Tool for national economic growth

Taxation is central to development and economic growth. It supports the basic functions of an effective state and sets the framework for economic growth. Prosecutor may also catalyze the state building and improving accountability between citizens and the state. While fiscal reform program has so far focused mainly on increasing domestic resources, has paid little attention to the broader role of taxation in building state-citizen relations effective.

Income to head the government

The government is an organization that has its costs to run it. Human resources, furniture and accessories, construction and vehicles, etc. must be financed and paid as an organization. Government makes programs and policies, which implies that, execute and manage taxes needed to keep them running.

• Utilities and services

Justice, security, better infrastructure; roads, markets, logistics, postal services, railways, airports, water, energy, electricity, employment, education and health centers, etc. government demand. How the government can give us all these facilities? Government requires income and tax collections are most of their income. We blame the government when it does not pay all this, but do not understand the fact that we do not pay taxes properly. Especially in developing countries this is the main problem is that people do not pay taxes, tax revenues are lower than expected.

• Free Education and Medicare

The poor in the society of a country that cannot afford to send their children in schools or universities, so that their children cannot get education and cannot become a responsible and civilized citizen but would become a liability in society and the economy. Even poor people cannot afford to be sick because doctors’ charges are greater than their annual income. That's why the government offers free, capitalization and health-care education.

• National security

External threats and conspiracies are dangerous to liberty country, to prevent these national defense forces and intelligence agencies are mandatory and have huge structure that requires lots of handling and taxes are the resources to fund them.

• Protect domestic industry

Foreign companies that target markets worldwide and its products hit domestic products that reduce the incomes of these companies source and threaten their survival. Government protects domestic industry from foreign industry through taxes; by imposing heavy taxes on imports increases results in less import prices of such products.

• Taxation and Governance

Another role of taxation which is often overlooked – it act as a catalyst for more responsive and accountable governments, and to expand the capacity of the state.

What are the links between fiscal and governance?

Taxation can improve governance in three ways:

1. The development of a shared interest in economic growth: governments that depend on taxes have greater incentives to promote economic growth.

2. Develop the state apparatus: Tax collection requires a functioning administration. Its development can stimulate improvements in state capacity elsewhere.

Taxation can improve the responsiveness and accountability through incentives for citizens and government to enter into a "fiscal contract". Through this process, citizens accept and comply with the tax return for the provision of effective services of government, the rule of law and accountability. Tax bargains are mutually beneficial, as citizens are better government, while the government receives predictable revenues and easily collected large.

Finally, the tax contributes in generating resources for the government so that it can provide services to all citizens. The government uses the proceeds to support public health care, social security, national defense, public housing, free primary education and many other social services. Which consequently creates jobs and increases circulation of money leaving the country; therefore, a better way of life and civilized nations is achieved. The taxes we pay fuel our society.

Oliver Wendell Holmes once said: 'I like paying taxes. With them I buy civilization'.