Abstract: Taxation regulation and tax rates are directly linked to the government’s revenue generated from taxation that allows the nation to prepare a suitable budget for overall expenditure. This study intends to examine the efficacy of taxation and related policies and protocols in impacting the welfare of a nation. Considering this, a secondary research has been carried out here followed by a qualitative design for gather relevant data from sources published between 2019 and 2023. Besides, qualitative information has been collected from chosen 9 sources to formulate relevant graphs and tables. Now, depending on the results of thematic analysis, it has been identified that taxation policies are likely to influence the economic stability in terms of controlling the revenue generated from taxation and government expenditure on social, economic and environment development aspects. Besides, concentration on introducing an effective taxation system can help in promoting the welfare activities of a country through availing capital allowance for businesses. In this context, developing countries extract a major part of revenue from VAT (value-added tax) charged on foreign MNEs. This, as a result, helps the domestic market to grow further while formation in tax policies that stimulates business activities can positively boost the economic development of a country through meeting sustainable goals.

Keywords : Annual Income, Economic Development, Economic Stability, GDP, Revenue Collection, Taxation, Taxation Policies and Laws, Welfare.