Taxation is said to be one of the key governance tools of any state including the upholding of Zambians sovereignty.

INTRODUCTION

The most fundamental function of taxation is raising revenue to pay for governmental expenses and programs. "Taxes are necessary to raise revenue for public goods and infrastructure, as well as to provide other sorts of public services conducive to general welfare and economic growth." Tax revenues pay for the necessary goods – like national defense or a legal system – that an unregulated market cannot provide by itself. More often overlooked is the role of taxation as a catalyst for the development of responsive and accountable government, and for the expansion of state capacity.

Taxes, however, do more than simply raise revenue: "Any tax that produces revenue will in some way alter the social and economic order." Taxes that only raise revenue without effecting other changes do not exist in the real world. The concept of fiscal policy captures that link between revenue collection and government spending. More specifically, taxes can be used to increase or decrease inflation and purchasing power, stimulate investment, and prevent harmful concentrations of wealth.

Taxation is an underrated tool in the effort to build more capable and responsive states. The role of taxation as a central force in the development of democracy resonates strongly in Anglo-American history. The duty of paying for government legitimizes demands for services and accountability. When eighteenth-century American rebels declared "No taxation without representation!" in Boston Harbor, they were echoing convictions developed in earlier struggles between rulers and revenue-producers on British soil. Democracies are built not only on periodic elections but also on a social contract based on bargaining over the collection and spending of public revenue.