Public Finance and Taxation
Economics · Public Finance
Syllabus tag: KCSE | Business Studies | Form 4 | Topic 26 Public Finance
Lesson objectives
By the end of this topic, you should be able to:
- Explain public finance and the sources of government revenue.
- State the principles of taxation and of government expenditure.
- Distinguish impact from incidence of a tax.
- Classify taxes and compare direct with indirect taxation.
Summary
Public finance concerns how government raises and spends money. Taxes are classified by how the rate changes with income — progressive rises, proportional stays the same, regressive falls — and by who pays — direct taxes cannot be shifted, indirect taxes can. The distinction between impact and incidence is the key analytical idea.