Objectives of Taxation:
- 1. Revenue Aspect: The time honored objective of taxation is to raise revenue. The introduction of new tax measures or the strengthening of existing measures means an increase in government income to finance normal expansion of governmental activity. ...
- 2. Regulatory Objective: A second objective of taxation is that of regulation or control. This is ‘sumptuary taxation’. ...
What is the non revenue objective of taxation?
What is the primary purpose of taxation?
How does taxation affect price stability?
Why are taxes like custom duties used?
How does taxation affect economics?
Why does disposable income rise?
What happens if financial resources are channelized in the unproductive sectors of the economy?
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What are the two basic objectives of taxation?
The basic objective of taxation is to raise resources for the State. It can be used to reduce inequalities, to accelerate economic development, as a tool to regulate consumption, imports and exports, in addition to its basic objective of raising revenues.
What are the objects of income tax?
Income taxes are a source of revenue for governments. They are used to fund public services, pay government obligations, and provide goods for citizens. In addition to the federal government, many states and local jurisdictions also require that income tax be paid.
Which one is the main objective of a tax?
The primary goal of a national tax system is to generate revenues to pay for the expenditures of government at all levels.
What are the characteristics and objectives of tax?
The main characteristic features of a tax are as follows: (1) A tax is a compulsory payment to be paid by the citizens who are liable to pay it. Hence, refusal to pay a tax is a punishable offence. (2) There is no direct quid-pro-quo between the tax payers and the public authority.
Which is the main objective of a tax Mcq?
The primary purpose of taxation is to raise revenue to meet huge public expenditure.
What are the 7 principles of taxation?
Principles of a good tax system They are the principles of convenience, simplicity, economy, equity, certainty, flexibility and stability.
What is the first objective of taxation?
1. The main purpose of taxation is to raise revenue for the services and income supports the community needs. Public revenues should be adequate for that purpose.
What are the objectives of taxation State 3 objective?
The tax literature identifies three justifications for taxation: (1) to finance public expenditures, (2) to redirect social and economic behavior, and (3) to redistribute wealth (Avi-Yonah 2006) .
What are the objectives of taxation in developing countries?
The main objective of taxation is to fund government expenditure. But it is not the only objective, taxation policy has some non-revenue objectives. These objectives are: Economic development – Resource mobilization for economic development is done through taxation.
What are the objectives of tax planning?
Objectives of Tax Planning It ensures savings on taxes while simultaneously conforming to the legal obligations and requirements of the Income Tax Act, 1961. The primary concept of tax planning is to save money and mitigate one's tax burden.
What are the objectives of indirect taxation?
The government collects indirect taxes from citizens to generate fiscal revenue. Government adds this tax to the price of a commodity and service. Therefore, any person, disregarding the rich or poor, has to pay indirect taxes equally. The government collects indirect taxes from citizens to generate fiscal revenue.
What are the five functions of taxation?
There are five main functions of taxation: fiscal, redistributory, regulating, controlling, and promoting.
What are the 4 types of income taxes?
Here is a list of 3 various kinds of income taxes-Wealth Tax. If you want to know about the different types of income tax, start with the wealth tax. ... Corporate Tax. As per the IT Act of 1961, national as well as international corporate organisations are also required to pay corporate tax. ... Capital Gains Tax.
What are the 5 types of income tax?
Let us understand these tax heads of income one by one in detail.Income from Salary.Income from House Property.Income from Profits and Gains from Business or Profession.Income from Capital Gains.Income from Other Sources.
What is the object of tax audit?
The audit under section 44AB aims to ascertain the compliance of various provisions of the Income-tax Law and the fulfillment of other requirements of the Income-tax Law. The audit conducted by the chartered accountant of the accounts of the taxpayer in pursuance of the requirement of section 44AB is called tax audit.
What are the 4 types of taxes?
Types of TaxesIncome tax: This tax stems from revenue earned through a job or a personal venture. ... Payroll tax: This tax is deducted from an employee's paycheck. ... Capital gains tax. ... Estate tax: This tax is imposed after an individual dies and their property is transferred to a living person.
What is taxation?
Taxation is the imposition of compulsory levies on individuals or entities by governments in almost every country of the world. Taxation is used pr...
How does taxation relate to government revenue?
In modern economies, taxes are the most important source of governmental revenue. However, taxation is not a government's only source of revenue. T...
What type of taxation is a direct tax?
A direct tax is a type of taxation of an individual that is typically based on the individual’s ability to pay as measured by income, consumption,...
What type of taxation is an indirect tax?
An indirect tax is a type of taxation levied on the production or consumption of goods and services or on transactions.
What kind of taxation is VAT (value-added tax)?
Value-added tax (VAT) is a type of indirect taxation levied by a government on the amount that a business adds to the price of a commodity during p...
Five major objectives of taxation to a country - SB-Accounting
Generate revenue for the government: This happens to be the most important or primary objective of taxation to a country.Taxes collected from individuals, companies, and goods provide a lump sum of money required by the government to meet its purposes.
(PDF) Functions and Objectives of taxation - Academia.edu
Functions and Objectives of taxation Matsiko Godwin Muhwezi The original aim of taxation was to provide the revenue necessary to fund state functions.
Objectives Of Tax | Accounting-Finance - Blogger
Tax serves as an instrument for promoting economic growth, stability and efficiency. The government controls or expands the economic activities of the country by providing various concessions, rebates and other facilities.
Objectives behind Taxation - INSIGHTSIAS
About Us. InsightsIAS has redefined, revolutionised and simplified the way aspirants prepare for UPSC Civil Services Exam. Today it’s India’s top website and an institution when it comes to imparting quality content, guidance and teaching for IAS Exam.
What is the main objective of tax?
Tax is the major source of revenue for the government. The main objective of tax is to raise revenue to meet the expenditure, tax is used by the modern governments to achieve, at the same time, many other objectives too. Let us discuss below the main objectives of taxation.
What are the components of fiscal decentralization?
Components of fiscal decentralization are: 1. Expenditure Sharing The central government in a federal system, transfers the public expenditure responsibilities to the lower levels of government. Each state government has unique public expenditure obligations depending upon the needs of their people. In most cases, the state government is responsible for social sector expenditure on education and health, child and youth welfare, subsidised housing. 2. Tax Sharing Some taxes are levied by the central government and part of the proceeds is transferred to the state governments.Tax-sharing is advantageous because, when tax is collected by one authority it brings in uniformity of tax rate, makes collection easier and lowers cost of collection. In India, the centra
Why are taxes levied?
Taxes are levied in almost every country of the world, primarily to raise revenue for government expenditures, although they serve other purposes as well. This article is concerned with taxation in general, its principles, its objectives, and its effects; specifically, the article discusses the nature and purposes of taxation, ...
What was the purpose of taxation in the 19th century?
Purposes of taxation. During the 19th century the prevalent idea was that taxes should serve mainly to finance the government. In earlier times, and again today, governments have utilized taxation for other than merely fiscal purposes.
What are the most important sources of revenue?
In modern economies taxes are the most important source of governmental revenue. Taxes differ from other sources of revenue in that they are compulsory levies and are unrequited—i.e., they are generally not paid in exchange for some specific thing, such as a particular public service, the sale of public property, or the issuance of public debt. While taxes are presumably collected for the welfare of taxpayers as a whole, the individual taxpayer’s liability is independent of any specific benefit received. There are, however, important exceptions: payroll taxes, for example, are commonly levied on labour income in order to finance retirement benefits, medical payments, and other social security programs—all of which are likely to benefit the taxpayer. Because of the likely link between taxes paid and benefits received, payroll taxes are sometimes called “contributions” (as in the United States ). Nevertheless, the payments are commonly compulsory, and the link to benefits is sometimes quite weak. Another example of a tax that is linked to benefits received, if only loosely, is the use of taxes on motor fuels to finance the construction and maintenance of roads and highways, whose services can be enjoyed only by consuming taxed motor fuels.
Why are payroll taxes called contributions?
Because of the likely link between taxes paid and benefits received , payroll taxes are sometimes called “contributions” (as in the United States ). Nevertheless, the payments are commonly compulsory, and the link to benefits is sometimes quite weak.
Why are payroll taxes levied on social security?
There are, however, important exceptions: payroll taxes, for example, are commonly levied on labour income in order to finance retirement benefits, medical payments, and other social security programs —all of which are likely to benefit the taxpayer.
What is income tax?
Pursuant to the present Code, income shall be understood as economic gain in the form of money or in kind, that shall be taken into account, if it can be estimated and to the extent that this gain can be estimated, and [income] determined in accordance with Chapters "Personal Income Tax", "Enterprise (Organization) Income Tax", and "Tax on Capital Gains" of the present Code.
What is realization of goods?
Realization [sale] of goods, works (services) by an organisation or an individual entrepreneur shall be respectively construed as the transfer of title to goods, transfer of results of completed works from one person to another, repayable provision of services by one person for another (including an exchange of goods, works, or services) for a compensation, or, in cases provided for in this Code, the transfer of the right of ownership of goods, of the results of performed works by one person for another person, the rendering of services by one person to another person free of charge.
What is the definition of "works"?
Operations in the sale of goods (works, services), property, revenue, profit, value of realized [sold] goods (works, services), or another object having a cost, quantitative or physical characteristic whose existence is linked to the emergence of a tax liability of the taxpayer according to the legislation on taxes and fees may be objects of taxation.
What is a tax?
Dalton opines that “a tax is a compulsory contribution imposed by the public authority irrespective of the exact amount of service to the tax payer in return and not imposed as a penalty for any legal offence”. Prof. Adams gave a Comprehensive definition of a tax stressing the various aspects of tax.
What is tax in the government?
Seligman; “tax is a compulsory contribution from the person to the government, to defray the expenses incurred in the common interest of all without reference to special benefit conferred”. A tax is a leakage from the circular flow of income into the public sector.
What is the essence of a tax?
According to Taussing “the essence of a tax as distinguished from other charges by government is the absence of a direct ‘quid-pro-quo’ between the tax payer and the public authority”.
What is tax leakage?
A tax is a leakage from the circular flow of income into the public sector. It is paid by individuals, corporations and other associations of individuals. It represents a payment out of the income of the people.
Why should there be a variety of taxes?
There should be a variety of taxes properly co-ordinated, so as to form a united and consistent system. The tax system should be broad based. This canon requires that the tax system should not rely on a few taxes. There should be a large number and variety of taxes, so that it can touch all sections of the people in the society.
Why should tax policy aim at bringing about stability in the economy?
Growth may sometimes generate inflationary pressure in the economy. Hence, tax policy should aim at bringing about stability in the economy.
What is tax definition?
Definition of Tax: In every country major part of the revenue is raised through taxation. According to Prof. Taylor “Taxes are compulsory payments to governments without expectations of direct return or benefit to the tax payer”.
What is the non revenue objective of taxation?
Non-Revenue Objective. Objective # 1. Economic Development: One of the important objectives of taxation is economic development. Economic development of any country is largely conditioned by the growth of capital formation. It is said that capital formation is the kingpin of economic development. But LDCs usually suffer from the shortage of capital.
What is the primary purpose of taxation?
The primary purpose of taxation is to raise revenue to meet huge public expenditure. Most governmental activities must be financed by taxation. But it is not the only goal. In other words, taxation policy has some non-revenue objectives. Truly speaking, in the modern world, taxation is used as an instrument of economic policy.
How does taxation affect price stability?
Price Stability: Thirdly, taxation can be used to ensure price stability—a short run objective of taxation. Taxes are regarded as an effective means of controlling inflation. By raising the rate of direct taxes, private spending can be controlled. Naturally, the pressure on the commodity market is reduced.
Why are taxes like custom duties used?
Fifthly, taxes like custom duties are also used to control imports of certain goods with the objective of reducing the intensity of balance of payments difficulties and encouraging domestic production of import substitutes.
How does taxation affect economics?
It affects the total volume of production, consumption, investment, choice of industrial location and techniques, balance of payments, distribution of income, etc.
Why does disposable income rise?
Since the level of employment depends on effective demand, a country desirous of achieving the goal of full employment must cut down the rate of taxes. Consequently, disposable income will rise and, hence, demand for goods and services will rise.
What happens if financial resources are channelized in the unproductive sectors of the economy?
If financial resources or investments are channelized in the unproductive sectors of the economy the economic development may be jeopardized, even if savings and investment rates are increased.
