Concept of Tax
Features of Tax
- Taxes are the main source of government revenue.
- Tax is the compulsory contribution.
- Tax is imposed only by the government.
- Tax is a legal receipt.
- There is no quid pro quo in taxation.
- Tax payment involves sacrifice by the taxpayers.
- Tax is paid out of taxpayers’ income.
- Receipt from tax is spent for social welfare.
- Tax is one of the fiscal instruments.
Objectives of Taxation
- Protection of local industries against foreign competition
- Restriction of general consumption level as well as harmful products
- Make contribution to government revenue even by the common people
- Promotion of capital formation and economic growth
- Maintain economic stability and optimum level of employment
- Reduction of inequalities national income and wealth among the people and
- Help in environmental protection.