Taxes are a primary source of revenue for governments. This revenue is essential for education, healthcare, transportation, and public safety. Without adequate tax revenues, governments would struggle to maintain these essential services and infrastructure.

The same helps in stabilizing the economy by influencing economic activity. For example, progressive taxation helps to reduce income inequality whereas taxes and subsidies contribute to overall economic stability and growth.

Imposition of taxes is used to redistribute wealth and addressing income inequality. Higher income individuals pay a higher percentage of their income in taxes that help to reduce disparities between the wealthy and the less affluent, promoting social equity.

Taxation is fundamental to the development of nations as it provides the financial resources necessary for public services, promotes economic stability and growth, supports infrastructure development, and helps in the redistribution of wealth. Effective tax policies and administration are crucial for ensuring that taxation contributes positively to a nation’s development.