Public Finance and Taxation
PUBLIC FINANCE AND TAXATION
BY
CHILESHE M. PATRICK
INTRODUCTION
There are varying definitions of what public sector economics is and what topics it covers. In a layman’s language Public economics is the application of economics to the activities undertaken by the state. Black et al. defines public sector economics as “the field of economics which studies the nature, principles, and economic consequences of government expenditure, taxation, financing and the regulatory actions undertaken in the non-profit making government sector”.
Thus it looks at the efficiency of various approaches used by government in its day to day operations. For the government uses economic policy instruments which are designed to influence economic behavior in order to achieve certain outcomes. The government has various goals which it pursues they include; i) Macro-economic stability ii) Enhanced economic growth iii) Balance of payment stability iv) Income distribution.
The ultimate goal of these policies is to improve people’s welfare. As already mentioned government uses instrument of fiscal and monetary policy to achieve its goal. The use of government expenditure and taxation to influence economic outcome is referred to as fiscal policy. Fiscal policy is often outlined through the annual budget which is presented to parliament every year. The budget outlines its objectives in the budget and how these are going to be achieved. On the other Monetary policy is aimed at influencing the supply of money and consequently economic growth. The central Bank is an independent arm of the state which is mandated with running the monetary policy. In Zambia, monetary policy is the responsibility of the Bank of Zambia.
In public sector economics we study the impact of instrument of fiscal policy on economic efficiency. Instruments of fiscal policy include; i) Expenditure ii) Taxation iii) Financing iv) Regulations
The first two involves the procurement and
BY
CHILESHE M. PATRICK
INTRODUCTION
There are varying definitions of what public sector economics is and what topics it covers. In a layman’s language Public economics is the application of economics to the activities undertaken by the state. Black et al. defines public sector economics as “the field of economics which studies the nature, principles, and economic consequences of government expenditure, taxation, financing and the regulatory actions undertaken in the non-profit making government sector”.
Thus it looks at the efficiency of various approaches used by government in its day to day operations. For the government uses economic policy instruments which are designed to influence economic behavior in order to achieve certain outcomes. The government has various goals which it pursues they include; i) Macro-economic stability ii) Enhanced economic growth iii) Balance of payment stability iv) Income distribution.
The ultimate goal of these policies is to improve people’s welfare. As already mentioned government uses instrument of fiscal and monetary policy to achieve its goal. The use of government expenditure and taxation to influence economic outcome is referred to as fiscal policy. Fiscal policy is often outlined through the annual budget which is presented to parliament every year. The budget outlines its objectives in the budget and how these are going to be achieved. On the other Monetary policy is aimed at influencing the supply of money and consequently economic growth. The central Bank is an independent arm of the state which is mandated with running the monetary policy. In Zambia, monetary policy is the responsibility of the Bank of Zambia.
In public sector economics we study the impact of instrument of fiscal policy on economic efficiency. Instruments of fiscal policy include; i) Expenditure ii) Taxation iii) Financing iv) Regulations
The first two involves the procurement and