Business impact to the Government limits in natural monopolies (industries like tap water and

(Tax revenues, poverty alleviation, basic services) railways).

Government: A group of people that governs a Also, firms may develop monopsony power, where they
community or unit. It sets and administers public policy are able to pay low wages and provide poor working
and exercises executive, political and sovereign power conditions for workers. In this case, the government may
through customs, institutions, and laws within a state. A need certain regulations on labour markets, such as
government can be classified into many types-- minimum wages, minimum age of working and provide
democracy, republic, monarchy, aristocracy, and basic levels of health and safety.
dictatorship are just a few. 5. Macroeconomic management.
Tax revenues: is defined as the revenues collected -Capitalist economies can be subject to economic cycles
from taxes on income and profits, social security – economic booms and recession. Recessions can lead to
contributions, taxes levied on goods and services, lost output and higher unemployment. In this case, the
payrolltaxes, taxes on the ownership and transfer of government may use fiscal policy to influence aggregate
property, and other taxes. demand. The government may also use monetary policy,
Poverty: is about not having enough money to meet basic though, in recent years, many governments have delegated
needs including food, clothing and shelter.  monetary policy to an independent Central Bank. In
Services: addition to trying to solve recessions, the government will
-Intangible products such as accounting, banking, also try to avoid inflation. This can involve higher taxes
cleaning, consultancy, education, insurance, expertise, and higher interest rates.
medical treatment, or transportation. 6. Reducing inequality/poverty.
capitalist / free market economy means that most In a capitalist economy, we may see a growth in
business and consumption decisions are left to private inequality and poverty. This can be due to inherited
firms and individuals. The government does not get wealth and opportunity. It can also be due to monopoly
involved in owning the means of production or deciding power. The government may feel the need to ensure
what and how to produce. However, there is no ‘pure everyone has an equal opportunity, for example providing
capitalist’ system without any kind of government education so even those from poor family have the
intervention. opportunity to get qualifications. It may also involve
Main functions of government redistributing income from high earners to low-income
1. Protection of private property / national security. earners, e.g. progressive taxes such as higher rate of
-If a country has a problem with crime, then it will income tax and providing means-tested benefits such as
discourage investment and the quality of life. The role of income support/housing benefit and state pensions.
the government is to ensure basic law and order, through Where does the government spend its money?
ensuring the rule of law. This involves protecting the
rights to private property. In a free market, there is an
incentive to free ride on the provision of law and order,
therefore it tends to be under-provided. A government can
pay for policing through general taxation. A similar
function of the government is to provide for national
defence – paying for an army. It is military spending
which often was the primary cause of the first taxes.
Kings raising taxes to pay for his army.
Policing and courts are an example of a public good –
which usually require government provision.
2. Raising taxes.
-To provide public goods and public services, the
government needs to raise tax. They can do this in a
variety of ways – taxes on goods (customs duties), taxes
on income, taxes on people (poll tax) and tax on property
and land. The government has to consider the best way of
raising taxes. A good tax is efficient (doesn’t distort
economic activity); easy to collect (hard to avoid/); fair
(may involve taking a higher proportion of high earners).
If the government run a budget deficit, they will need to
raise the shortfall through borrowing and selling Here are five reasons why you pay taxes and why you
government bonds. should make sure you pay the right amount:
3. Providing public services.
Public goods tend to be not provided in a free market 1. They ensure that we receive our basic needs.Taxes
because of the free rider problem. Therefore, these goods answer for all of government’s expenditures, including the
and services need to be provided by the government. running of those agencies that make it possible for us to
Examples of public goods include street lighting, roads access basic necessities and services. This includes water,
and law and order. There are also public services which power, roads, airports, and even the Metro Rail Transit.
are provided piecemeal in a free market, like education When tax revenues are low and the government limits its
and healthcare. However, the government may feel that budget for these services, we will ultimately suffer with
these merit goods are important for equality and poor delivery of basic services.
improving labour productivity. Therefore, most 2. They help keep us safe.
governments provide some form of state provided Our taxes are used to pay for the salaries of military
education and health care. personnel and policemen, who keep us safe and keep
4. Regulation of markets. peace and order in our country. Because of tax revenues,
-Adam Smith in ‘Wealth of Nations‘ noted that in a free both the training and equipment of security forces are
market, firms were often able to create monopoly power. upgraded, putting them in a better position to defend us.
This enables them to charge excessive prices to
consumers. The government may need to regulate
monopoly power, e.g. prohibiting mergers or setting price 3. They keep business costs low.
When the government is able to collect enough taxes, it This service allows you to enjoy the convenience of
does not suffer a revenue shortfall which can otherwise getting an appointed date, time, and and option for DFA
affect the country’s economic fundamentals and passport delivery.
prospects. When our economic fundamentals are weak 6. DOST Scholarship Grants
because of low tax collections, investor confidence -This service provides the schoalrships that students can
softens, therefore affecting the business environment and choose from. Students may apply for their ousing and
raising our country’s risk rating. This, in turn, translates to Utilities
higher interest rates which can only make it harder for us What if there is no government in our society?
to do business individually. 1. There would be no Laws to be implemented. (too much
4. They help ensure a better future for our children. crimes will arise)
Our taxes pay for the salaries of teachers in public schools 2. There will be no one to monitor the prices of the
and fund the construction of school buildings, as well as products to be sold to the consumers.
the procurement of books, and school supplies. Education 3. The place will be chaotic.(Riots and armed mobs
is a great enabler and equalizer, opening up opportunities would rule the land)
that otherwise would not exist for the poorest of the poor. 4. Food in the cities would quickly dry up and there
By paying our taxes, we are able to educate our children would be a mass exodus into the countryside as
and the future generation of Filipinos. hungry people look for food.
5. They help the poorest of the poor.
5. No securities.
Taxes fund government assistance for the poorest of the
poor. Taxes on alcohol and tobacco, for instance, have 6. Electricity would cut out as would gasoline and
been used to fund PhilHealth, the state health insurance fresh water.
fund. Taxes also fund the Conditional Cash Transfer
program, which give poor families a monthly allowance
as long as they keep their children in school. When References:
government services suffer, the poorest of the poor are http://www.businessdictionary.com/definition/
hardest hit because they do not have options. government.html
https://data.oecd.org/tax/tax-revenue.htm
Major Causes of Poverty in the Philippines: https://www2.gnb.ca/content/gnb/en/departments/esic/
1. Corruption. One of the big factors that contributes to overview/content/what_is_poverty.html
poverty in Philippines is corruption, a problem that https://www.economicshelp.org/blog/21699/economics/
doesn’t seem to end. Because of these corruptions, funds what-are-the-economic-functions-of-a-government/
are getting short for health, education, agriculture, and http://www.businessdictionary.com/definition/
other important matters. services.html
2. Lack Of Education. A corrupt leader wants his people https://www.quora.com/What-would-happen-if-there-was-
to be ignorant so that no one will make any move against no-government
him and his corrupt acts. They will not expedite things
that are related to developing the education system in our
country.
3. Fear. One of the things that prevents us from growing
and progressing is the fear. This is a result of
miseducation.
4. Lack of Discipline. Without discipline, you cannot
attain something significant. Through discipline, plans are
executed properly, consistent, and organized to achieve
whatever goals that you want in your life. Lack of
discipline is one of the big causes of poverty in the
Philippines.
5. Crab Mentality. Sadly, instead of being happy for
others who are making progress and getting success in
their fields, there are many people get jealous. In turn,
what they do is pull others down. This is such a poor
mentality that should be eradicated. I personally don’t like
it when I see shadow of these things in action.
6. OFW Thinking. This is not to offend our Overseas
Filipino Workers and it’s not their fault to choose that
path. OFWs are one of the factors why Philippine
economy is growing. This is sad because instead of
looking for investors, bring companies & industries inside
the Philippines, it seems like the government rather
choose to send our fellow Filipino kababayans abroad.
Some list of Government Services offered:
1. Birth Certificate
-This service allows you to request for your PSA
(formerly NSO) birth certificate online.
2. CSC Computerized Examination (COMEX)
-This service allows examinees to reserve their slots and
take the actual examination online.
3. CSC Online Examination Result Generation System
-This service enables examinees to view their test results.
4. Death Certificate
-This service allows you to request for your PSA
(formerly NSO) death certificate online.
5. DFA Passport Appointment System