PUBLIC FINANCES AND SUSTAINABLE TAX DEVELOPMENT

Abstract

This article reviews the relationship between public finance and tax-based sustainable development, highlighting the role that tax policies play in promoting inclusive and environmentally friendly economic growth. Through efficient resource mobilization through a progressive tax system and prudent management of public expenditure, governments can finance projects essential for sustainability, such as green infrastructure and equity-enhancing social programs. The article also explores how tax policy can be used to incentivize sustainability-friendly behaviors, such as environmental taxes, and to reduce economic inequalities through income redistribution. However, the challenges faced by governments in implementing these policies are highlighted, including tax evasion, limited institutional capacity in some countries, and the need for coherence between tax policies and sustainability objectives. The review concludes that a fair and progressive tax system is crucial to ensure the success of sustainable development policies and intergenerational equity, while maintaining inclusive and resilient economic growth in the long term.

Keywords: public finance, sustainable development, tax policy, fiscal equity, environmental taxes.