Tax may be defined as a ” pecuniary burden laid upon individuals or property to support the government a payment exacted by legislative authority”. It is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority.
Taxation may also be defined as any contribution imposed by government whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or any other name. In modern taxation systems, taxes are levied in money, but in kind taxation is characteristics of traditional or pre-capitalist states and their functional equivalents. The method of taxation and the government expenditure of taxes raised are often highly debated in politics and economic.
According to Prof. Seligman___” Tax is a compulsory contribution from a person to the government to defray the expenses incurred in the common interest of all, without reference to special benefits conferred.
According to Bastable___” Taxation is a compulsory contribution of the wealth of a person or body of persons for the service of the public powers”.
According to Taylor___” Taxes are compulsory payment to the government without expectation of the direct return or benefit to the tax-payer”.
There are three stages in the imposition of tax;
- The declaration of tax liability i.e., the party of the statute, which determines the persons in respect of what property are liable.
- The assessment of tax liabilities.
- The method of recovery if the person taxed does not voluntarily pay.
Nature of Taxation
- Taxation is a legal Collection.
- Itis a Personal Obligation.
- It is a Compulsory Contribution.
- It Imposed by Government alone.
- Revenue Collection.
- Socio-Economic Objective.
- It is a Contribution for the Common Benefit of the Society.
- Benefit is not a condition for Tax payment.
- It is not Imposed to Realize Cost of Benefit.
Objectives of Tax
- Rising Public Revenue.
- Regulation and Control of Economic system.
- Reduction of Inequalities in Income and Wealth.
- Bringing Business Stability and Maintaining Full Employment Conditions.
- Promoting Capital Formation.
- Political Objectives.
- Increase in Nation Income.
- Restrict Unnecessary Consumption.