Taxation, types, objectives

Taxation, types, objectives

1. Taxation system in Pakistan

2. Tax (definition): It is a compulsory contribution to state revenue , imposed by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions . Taxes are involuntary fees levied on individuals or  corporations and enforced by a government entity—whether local, regional or national—in order to finance government activities.  a charge usually of money imposed by authority on persons or property for public purposes The act of impose taxes is called taxation.

3. Public finance and public revenue: It is the branch of knowledge which is concern with the income and expenditure of public authorities and adjustment of one to another. It deals study of revenue and expenditure of government at the center, state and local bodies . Public revenue is the one of the branch of public finance. It deals with various resources from which the state might derives the income .

4. tax 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 . For example: 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. 

5. Objectives of taxation: Raising revenue Regulation of consumption and production Encouraging domestic industries Reducing Income equality Promoting economic growth Ensuring price stability Development of background region

6. Types of tax: Tax can be classify into two types : Direct tax Indirect tax

7. Direct tax: A direct tax is that tax whose burden is borne by the same person on whom it is imposed. Direct taxes  refer to  taxes  that are filed and paid by an individual directly to the government . It is based on income and property of a person . a direct tax is one that cannot be shifted by the taxpayer to someone else

8. Examples of direct tax: Corporation tax Income tax Wealth tax Gift tax Property tax Expenditure tax

9. Indirect tax: An indirect tax is that tax which is initially paid by one individual , but burden of which is passed over to some other individual who ultimately bears it. It is imposed on expenditure of a person . Indirect taxes are levied on the production or consumption of goods and services or on transactions, including imports and exports . General sales taxes are imposed that are applied to a specific portion of consumer expenditures.

10. Example of indirect tax: Sale tax Value added tax Excise duty Custom duties Import duty Tax on legal transcription

11. categories of taxes: There are several very common categories of taxes: Income Tax —a percentage of individual earnings filed to the federal government Corporate Tax —a percentage of corporate profits taken as tax by the government to fund federal programs. Sales Tax —taxes levied on certain goods and services Property Tax —based on the value of land and property assets Tariff —taxes on imported goods imposed in the aim of strengthening internal businesses Estate tax —rate applied to the fair market value of property in a person's estate at the time of death

12. Canon of taxation: Admin smith has formulated four principal of taxation; Canon of equality Canon of certainty Canon of convenience Canon of economy

13. Conclusion: To conclude that, we can say that the instrument of taxation is of great significant on: Increasing the level of economic activity Reducin g income inequality Promoting economic growth Promoting economic growth Ensuring price stability

14. Review of presentation: Public revenue is a branch of---------- a. Government finance b. public deposit c. Public finance d. public expenditure 2. Who gave the concept of 4 canon's of taxation ? a. W. Hogarth b. Admins smith c. Tory Taylor d. j swift 3. Objective of tax is to-------- a. Generate government revenue b. foreign trade c. Political campaign d. FDI

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