
Principally, tax legislation is designed and implemented for generating revenue for Government Expenditures and to meet the deficit of the country. Government achieve following objectives by levying taxation:
- Collection of revenue for the administrative expenses of the Government.
- Government spent the surplus of collected revenue on the poor to maintain a balance in distribution of wealth.
- For implementation of policies and procedures, Tax implication helps the Government in multiple ways.
- Removal of current account deficit by increasing taxation rates on the imports and providing leverage to those whose export.
- Taxation systems play an important role in the negotiation of trade matters with the other countries.
- Taxation system of a country holds a power to control the inflation or depression of the country.
- Revenue collected via taxation system allows a Government to promote science and invention within the country.
- It also helps in building infrastructure within the country.
- Tax revenues also promote financial educational activities and maintain or improve the efficiency of local forces.
- It also assists in eliminating inequalities in distribution of wealth within the society.