Agricultural taxation in developing countries has always been an attractive issue for economists. politicians and lawyers. As the important role of government in economic development has been unanimously accepted and as taxation is held to be one of the means to increase saving and therefore Capital accumulation, it is quite natural that taxation in a main sector should attract so many minds to it.
There have been many discussions among economists över the priority of the agricultural versus the industrial sector in economic development. Now, it is widely accepted that this is a false issue. Agriculture and industry both have their places in development. Agricultural growth. can contribute vitally to compensate for the increase in food demand due to rapid urbanization. income increases and high income elasticity is inevitable for a balanced growth. increase in agricultural output can provide foreign exchange earnings for a developing country. which is an indispensable need in many cases. Also, the growth of this sector can make possible the transfer of the working population to industrial and service sectors and can contribute to capital formation by effecting terms of trade between the sectors «ceteris paribus», and can create demand for industrial output so necessary for development because of the «in-divisibility of demand».
Therefore. agricultural growth is indispensable for countryside economic growth. in many cases. Increasing the food supply may also compensate for malnutrition and undernutrition which are very widespread in developing countries and may increase the healthiness of the population For that reason, agricultural growth should be accepted as one of the best ways of «investment in human capital» which is so productive for development. |
