By Taku Fundira from Studies in Poverty and Inequality Institute –

The importance of taxation goes far beyond providing income to finance the public sector, investments, and the basic needs of the population. The establishment of states is partly attributed to the tax system which has also contributed to promoting the state’s legitimacy, strengthening democracy, as well as to creating economic well-being for the general population.

Also important to note is that fiscal policy shapes the environment in which trade and investment take place. Therefore, what is important to the current economic development agenda is the fact that taxation should provide the stable flow of revenue to finance numerous development priorities both physical and socio-economic, such as strengthening physical infrastructure or social protection measures, among others.

Read full article here