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Economics vocabulary · Fiscal Policy and Public Finance

Taxation

Meaning in economics, with examples

/tækˈseɪʃn/nounCore term

In economics, taxation means: The system by which a government collects money from people and businesses through taxes on income, profits, spending and property.

In Turkish: vergilendirme, vergi sistemi

How it is used

A formal word used in economics, law and policy: direct taxation (such as income tax) and indirect taxation (such as VAT and excise duties), progressive taxation, double taxation. In everyday news people usually just say tax or taxes.

Example sentences

  1. Indirect taxation, such as VAT, makes up a large share of government revenue in Türkiye.

  2. Under progressive taxation, people with higher incomes pay a larger share of their income in tax.

Common collocations

  • progressive taxation
  • indirect taxation
  • double taxation
  • levels of taxation
  • taxation system
  • fiscal policyThe government's decisions about taxes and public spending, used to influence demand, growth, jobs and the state of the public finances.
  • budget deficitThe gap that appears when a government spends more than it collects in taxes and other revenue during a year; it is usually covered by borrowing.
  • government spendingMoney that the state spends on public services, investment, salaries and social payments such as pensions; a key tool of fiscal policy.
  • subsidyMoney or other support that a government gives to producers or consumers to lower the price of a product or to encourage an activity.
  • incentiveSomething such as a reward, a price or a penalty that encourages people or firms to act in a particular way.

More terms: Fiscal Policy and Public Finance

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This page explains English vocabulary for learners. It is not financial advice.