INTERNATIONAL JOURNAL OF ECONOMIC LITERATURE (INJOLE)
Vol. 2 No. 12 (2025): SEPTEMBER

THE ROLE OF GOVERNMENT FISCAL POLICY IN ENHANCING ECONOMIC GROWTH AND STATE REVENUE THROUGH THE TAXATION SYSTEM

Loso Judijanto (IPOSS Jakarta, Indonesia)
Mohd Syahrin (Universiti Islam Sultan Sharif Ali, Brunei Darussalam)
Hydzulkifli Bin Haji Hashim (Universiti Utara Malaysia)



Article Info

Publish Date
01 Sep 2025

Abstract

Fiscal policy is one of the main instruments used by the government to manage the national economy through the regulation of state expenditure and revenue, particularly from the taxation sector. This study aims to analyse the role of government fiscal policy in promoting economic growth and increasing state revenue, with a focus on the taxation system as the main instrument. The method used is a literature review of various scientific sources, official government reports, and international institution publications. The results of the study indicate that effective fiscal policy, through productive expenditure allocation and fair and efficient taxation policies, can stimulate economic activity, increase investment, strengthen purchasing power, and expand the tax base. The tax system plays a dual role, namely as a source of development funding and as a tool for regulating economic behaviour, which, if implemented appropriately, will create a multiplier effect on economic growth. However, challenges such as low tax compliance, tax avoidance and evasion practices, and limited administrative capacity need to be addressed immediately through structural reforms, system digitalisation, and strengthening the principles of fiscal justice. Therefore, synergy between sound fiscal policies and a modern and equitable tax system is key to achieving inclusive, sustainable economic growth that supports improved public welfare.

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Journal Info

Abbrev

INJOLE

Publisher

Subject

Description

INTERNATIONAL JOURNAL OF ECONOMIC LITERATURE (INJOLE) is a scientific journal that publishes articles in the Business field includes conceptual ideas in the fields of Economics, Accounting, Management, business. The scopes are Human Resource Management, Marketing Management, Financial Management, ...