I've had this question for quite a long time by now ; wouldn't it be far more efficient in terms of administrative costs and beuraucratic efficiency to exempt public spendings from its taxes?
Of course it doesn't make sense to exempt the entirety of the public sector from taxation, since there are for example state owned enterprises like national rail/airport services or power generation /distribution services dealing with the private sector/individuals which generates income/added value just like any other private businesses, so taxing that income makes perfect sense.
Though when it comes to government spendings and its taxation, I can't think of other implications of it rather than we're just moving an egg out of one basket (in this case the executive branches and their budgets) to the other (respective tax services of each country). For a government spending for some kind of goods or services they purchase, be it a service of public workers as an employee of public services or acquisition of required goods or services from a private sector for a government project, we would be able to generalize one such spendings in two parts : the cost of the goods and/or services itself and the tax that occurs from the transaction. The former will be transferred from the government to the provider of the service or goods, be it a wage of individual public sector workers or goverment contracts to private businesses. The latter will end up at tax service through the transaction from the government to the provider of services/goods, then back to the goverment. Then that tax will again be allocated to each executive branches in form of a budget, which they will spend, get taxed, and the cycle repeats itself.
So from a purely economic sense, what are the reasons we can't get rid of the latter? I've seen some social implications of taxing the public sector which I fully understand, though was currious if there are more economical reasons as well for taxing government spendings. For clarifications, by tax I'm purely talking about income/added value tax of the provider of services and goods to the goverment, from the government spedning. By this I'm not arguing that we should for example exempt public sector workers from consumption tax.