tax revenue decline

Tax revenue decline occurs when a government collects less money from taxes than expected. This can happen due to economic downturns, where individuals and businesses earn less and, consequently, pay lower taxes. Changes in tax laws or rates, increased tax evasion, or a shrinking tax base—such as population decline or job losses—can also contribute. Additionally, if there are more tax deductions or credits, the amount collected can decrease. A decline in tax revenue can impact public services, infrastructure, and overall government budgeting, leading to potential challenges in financing essential programs.