Tax policy refers to the rules and regulations that govern how taxes are collected, managed, and spent by a government. It includes decisions about tax rates, the types of taxes imposed (such as income tax, sales tax, and property tax), and how tax revenue is allocated to public services like education, healthcare, and infrastructure. Governments create tax policies to achieve various economic and social goals, such as reducing income inequality or encouraging investment. These policies can change over time based on political priorities, economic conditions, and public opinion, impacting individuals and businesses alike.