The magnitude of tax revenue and the manner of its mobilisation, in terms of its composition and incidence with regard to diferent segments of the population, is of direct consequence to the development process and human well-being in society. While a higher tax-Gross Domestic Product (GDP) ratio1 based on high tax rates (and narrow tax base) could be detrimental to the growth of economic activity, giving rise to black economy
and encouraging the light of capital (both physical and human) from the country, a high tax-GDP ratio with moderate tax rates (and a broad tax base) could spur growth through improved scope for provisioning of public goods in the economy. It could also support the State’s capacity to create a social protection loor and, if required, speciic entitlements, especially for the poor and the vulnerable to help create more equal outcomes in the society. Similarly, a progressive tax system, where taxes levied take into account the ability of an individual to pay, is a potent redistributive tool, which could potentially support a more inclusive and equitable development process.