Tax, Appropriation of Economic Resource Flow for Social Protection and Good Governance
Author(s): GEORGE KWABENA OBENG TAKYI
The paper queried tax as a nuisance, and claims tax as a justified contribution to finance public expenditure and demand on persons exploiting economic resources of a state for their good. It seeks to establish how the sufficiency of tax revenue will reduce social costs and externalities from economic activities. Literature on the budget deficit and tax insufficiency concentrates on macroeconomic implications on growth theory, accepting evasion and avoidance schemes as normal lapses with limited attention on social cost and implications on society. Literature is synthesized with models to establish the trade-off between social benefits and social cost in the event of insufficient tax revenues and the effect on national identity, cultural and psychological cohesion and sovereignty for economic growth. The paper postulates tax as a moral obligation and legitimate contribution to finance public expenditure and not compulsion to accept evasion and avoidance schemes as normal ills in tax administration.
Keyword(s): Social benefit, Social cost, Tax sufficiency, Evasion, Avoidance