Question
Write briefly about the principles of taxation.

Answer

  1. Canon of Equality: The government should impose taxes in such a way that people have to pay according to their ability does not mean equal amount of tax but it means that the burden of a tax must be fair and just.
  2. Canon of Certainty: Certainty creates confidence in the taxpayer's cost of collection of taxes and increases economic welfare because it tends to avoid all economic waste
  3. Canon of Convenience: Taxes should be levied and collected in such a manner that provides a maximum of convenience to the taxpayers should always keep in view that the taxpayers suffer the least inconvenience in payment of the tax.
  4. Canon of Economy: Minimum possible money should be spent in the collection of taxes. Collected amount should be deposited in the Government treasury.

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