Functions reflect the economic nature of taxes. This is due to the fact that the system of taxes in the state, their aggregate value, demonstrates the degree of realization of the potential of this instrument of distribution and redistribution of social wealth.
Depending on what is in the statethe types of taxes and fees are accepted, it is possible to talk about the functions that they perform in the society. Moreover, the economic theory itself is not yet able to give an answer to the question of the functions performed by taxes and what they should perform in an ideal, what their types and sizes should be.
The most established opinion now is that taxes will most effectively perform two functions, this is the fiscal function of taxes and the distribution one.
The first, fiscal, function of taxes isone of the most important, and not only because it is implemented in an overwhelming number of states. Its universality lies in the fact that it is not mediated by any socio-economic system of the state and its economic system.
With this function, financialfunds and reserves of any country, and it is the fiscal function of taxes that forms the necessary conditions for the redistribution of social wealth between different social and economic groups of the population, economic entities, economic sectors.
As is known, any change in the quantitytax revenues significantly affect economic activity. Moreover, here we mean not only a reduction in these revenues, but also an increase in their incomes, since in this case social tension in society can increase. Consequently, it is extremely important to achieve such a state of affairs, in which redistribution of social wealth on the principles of economic expediency will be ensured. The fulfillment of this condition allows ensuring a combination of state and public interests at the level of acceptable for both parties. Hence the conclusion is drawn, according to which it becomes objectively necessary that the fiscal function of taxes be supplemented by a regulatory, or, as it is also called, distributive.
The nature of the distribution mechanism wasis known even at the stage of primary capital accumulation. The present, its modern content has changed to a significant extent. At the moment, the distribution function of taxes acts as a necessary and effective tool to stimulate the production process, its technological re-equipment, maintaining the optimal pace.
Use of taxes as a method of formationmeans of the state objectively causes necessity of contact of tax process with its participants - the enterprises, the companies, the population. In the process of this contact, the role of the distributive function is even greater. If during the period of capital accumulation, taxes were mainly involved in the creation of production as such, at the present stage, taxes are increasingly manifesting themselves as a regulatory tool. The effect of this instrument is realized through types of taxes and fees, the establishment of tax rates, the provision of preferences and benefits, the application of sanctions to various participants in economic relations. This shows that the tax policy directly interferes with the process of economic relations in society. By the way, another function, control, follows from this, the essence of which derives from the very nature of such a phenomenon as taxes. The redistribution of the social product through taxes in this case is inseparable from tracking the movement of financial resources in the economy.
Ultimately, by summarizing all the functions thatperform taxes, it should be recognized that they are called upon to ensure a balance between state and public interests and to create favorable conditions for progress.