ABSTRACT
Economists working in the field of comparative economic systems have generally neglected the question of taxation in socialist countries. Taxation and the State Budget are regarded as tools of economic policy which complement central economic planning. Firstly, taxation and the State Budget are major elements in the system of financial planning which complements economic planning. Secondly, taxation supplies funds to the budgetary sector, which is an important supplier of goods and services. In the economic theory of public finance, the case for budgetary provision of goods and services is usually based on the concept of 'market failure', to which a wide literature has been devoted. Economic stabilisation is also a function of the Budget under socialism. The Budget is a major influence on financial and monetary flows because of its role in the division of national incomes, and is therefore a major tool for securing monetary and financial equilibrium.
