As total business revenues decline in the face of such ill advised taxes, adverse effects such as direct and indirect job losses are likely to occur. Although this practice has become common, it has negative economic and social impacts. Sound economic policy for competing in the global marketplace states that taxing exports is self-defeating and should be avoided . Policymakers form all types of market economies realize that taxing goods and services upon export functions to reduce sales and ultimately the economic viability of a region as export dependent employment declines. Taxes on exports reduce competitiveness in the global marketplace .
Many counties rely on subsidies to keep goods and services priced competitively in export markets.
Although subsidies create artificial market conditions, the practice demonstrates the length to which governments will go to gain and maintain market share. Taxing exports causes the opposite effect. Taxes that raise prices significantly above free market values act to reduce competitiveness. The stifling of competitiveness has an enormous impact on income generation and employment . Many countries are grappling with high unemployment rates brought on by a variety of changes.