The principles of taxation include;
1: Equality-a tax must be imposed in such a way that the incidence of tax must be equal on different individuals.It is possible when tax is imposed at a higher rate on rich persons and at a lower rate on poor persons.The equality in sacrifice is important for the welfare of the society
2: Economy-it means the cost of collecting a tax must be minimum
3: Convenience-the tax must be imposed in such a way that the time and method of tax payment may be convenient for the tax payer.Tax on the income of employees is deducted on monthly basis but the tax on business is payable on annual basis.
4: Certainty-it means the amount of tax and time and method of payment should be certain.There must be no confusion in this regard.
5: Productivity-Every tax imposed should gibe greater income for the government.There is no use to impose any tax,if it does not bring big amount in the government.
6: Elasticity-it must be possible to increase or decrease the taxes according to the economic situation in the country.During inflation,taxes must be increased and vice versa.
7: Flexibility-it means there must be no hindrance in the way the government impose the tax.
8: Diversity-there must be different types of taxes,so that the burden of these taxes is on different groups of the society.
Bom answered the question on March 24, 2018 at 10:04
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