Question

1. What are the key factors that limit the ability of many developing countries to deploy taxation as a tool to reduce inequality and provide social security to the vulnerable groups?

1. Describe any three policy recommendations that you would offer to developing countries in order to enable them to benefit from international trade.

Answer 1

There are various key factors that limit the ability of many developing countries to deploy taxation as a tool to reduce inequality and provide social security to the vulnerable groups.
Vulnerable groups are considered to be those groups of people who experience very death poverty, the boycott of the general society, discriminating policies, violence, they have very limited abilities and resources to explore themselves in the society, they include ethnic minorities, Disable peoples migrants etc.
In developing countries there are only a few people who pay the high tax and if you consider the complete population then only 2% of the people are there who pay heavy taxes in the economy.
Developing countries are facing various challenges like extreme poverty low level of employment or higher unemployment conditions and this is the only reason these countries are facing difficulties to deploy a taxation as a tool to reduce inequalities because these countries taxation is not a solution because 98% people are not able to give the taxes as per the guidelines and there is a heavy problem of tax evasion.
Vulnerable groups do not come under the category of taxation because they are also facing critical conditions of poverty, unemployment and various other issues.
The three policies are recommendations that are offered to the developing countries in order to enable them to benefit from international trade.
One policy is the domestic industry protection which enhances the capabilities of productive efficiency in the economy
The another policy is the government expenditures on the export industries
The next policy of the government is to develop the industrial zones which are helpful to announce the industrial trade and helpful in the international trade.