Western historical know-how with taxation has been that a government’s enlarged financial dependency upon taxation revenues may produce governance benefits, as it persuades the accountability and taxation of a state to its inhabitants. Implicit or Explicit contract about who should pay for taxes, for what purposes and at what rates was reached through bargaining among the ruler and the prospective tax payers. In modern OECD regions concerns of taxation remain important and central, particularly around elections.
On the contrary, taxation is not high on the local political agenda in Balkan regions. With the exemption of Greece, The taxation politics are, generally, restricted to entail some specialized interest groups, and incline to take place in non-public fields. Diminutive lobby groups, pressure for exceptions, for rate decrease on imports, or bargain with ministers or officials regarding tax liabilities. Local government taxation is, though, a key exception to this. Around election time, this kind of taxation is frequently higher on the political agenda of both local and national politicians.
Though, this politicization of domestic government taxation doesn’t enhance taxation compliance between citizens. On the other hand, it frequently challenges domestic government taxation collection efforts. The primary reason why concerns of taxation has not gone into the political agenda in those regions is that only a minority of citizens pay for direct taxes to the state and the collapse of revenue raising seems most discriminating in countries that receive massive amounts of aid. Partially as a result of this, donors are progressively more directly included in recipient country taxation policy making and management.
In general, donors push for determined overall revenue targets. This might, in a few contexts, have considerable but unintentional negative impacts on taxpayer’s rights by coercive taxation enforcement; and accountability through empowering the administration at the expense of designated politicians. The fact that these matters are being treated by formal, public organizations, rather than through corruption and public deals may point out the start of a link among economic elites and government in matters of revenue generation.