1.
Tax is a
legal collection: a tax has statutory sanction. It cannot be imposed
arbitrarily. Certain legal requirements are to be followed in imposing a tax.
2.
Tax is a
personal obligation: a tax is a personal obligation and it creates a
personal responsibility on the taxpayers. No citizen should think of evading
tax. Every citizen should pay his/her taxes.
3.
Tax is a
compulsory contribution: it is a compulsory contribution to the state by
citizen, which may be paid willingly. State has the right to tax citizens.
Nobody can refuse to pay taxes claiming that he does not derive benefit from
payment of tax. Refusal to pay tax is a punishable offense.
4.
Element
of sacrifice: in the payment of taxes, an element of sacrifice is involved
because they are paid for the general interest of the community
5.
Tax is
imposed by government alone: government alone has the authority to levy
taxes. Even if the management of a temple or trust makes it compulsory for evey
devotee or family to pay a specific amount, it cannot be termed as tax.
6.
Revenue
collection: the power of taxation is used to raise sufficient revenues for
the state, apart from achieving other collateral objectives.
7.
Socio-economic
objectives: modern governments use tax as an instrument to achieve
structural change sand also realizing socio-economic objectives.
8.
Tax is a
contribution for the common benefit of the society: it is levied for the
common good of the society without any regard to benefit to particular
individuals. Tax is intended to use the proceeds for the benefit of the
community, to render public services etc., and not intended for benefiting any
one or a group of individuals.
9.
Benefit
is not a condition for tax payment: the taxpayer is not promised any
specific benefit. Taxes are paid because they are compulsory and the proceeds
used for common good. Benefit derived by a tax payer may not be proportionate
to the tax paid.
10.
Tax is
not imposed to realize cost of benefit: tax is not a realization of cost of
services or benefit. A poor person may be benefited most by way of public
expenditure without payment of any tax.
Related post:Classification of Tax
What is Tax
Comments
Post a Comment