Will Underdeveloped Countries Learn to Tax?

THE importance of public revenue to the underdeveloped countries can hardly be exaggerated if they are to achieve their hopes of accelerated economic progress. Whatever the prevailing ideology or political color of a particular government, it must steadily expand a whole host of non-revenue-yielding services?education, health, communication systems and so on? as a prerequisite for the country's economic and cultural develop ment. These services must be financed out of government rev enue. Besides meeting these needs, taxes and other compulsory levies provide the most appropriate instruments for increasing savings for capital formation out of domestic sources. By provid ing a surplus over recurrent expenditure, they make it possible to devote a higher proportion of resources to building up capital assets.