Effective Tax Systems Support Inclusive and Sustainable Growth

Abstract

Taxation holds a fundamental position in supporting national development and promoting social welfare. As the primary source of state revenue, taxes play a crucial role in financing infrastructure, education, healthcare, and various forms of public services that contribute directly to improving the quality of life. This study aims to examine the interrelationship between tax revenue, the effectiveness of fiscal policy, and their broader impact on economic equality and sustainable growth. By employing a literature review approach covering the last five years, the findings indicate that effective and transparent tax administration significantly enhances development performance while reducing social and economic disparities. Moreover, public trust in the government’s fiscal management has been identified as a decisive factor in determining tax compliance and the growth of national revenue. The implementation of adaptive, transparent, and accountable fiscal policies strengthens economic competitiveness, encourages productive investment, and expands employment opportunities. Therefore, optimizing the tax system constitutes a strategic foundation for maintaining macroeconomic stability, ensuring equitable distribution of income, and achieving long-term sustainable development objectives that align with the nation’s welfare agenda.