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Unformatted text preview: source of the government income.
This income is used for productive purposes and
thereby overall production is increased.
This increase in production leads to increase in
national income of the country along with increase in
per capita income. 15 Canons of Taxation
Canons of taxation refer to the administrative aspects of
a tax. They relate to the rate, amount method of levy and
collection of a tax.
In other words, the characteristics or qualities which a
good tax should possess are generally described as
canons of taxation.
Adam Smith has enumerated the following four canons of
taxation which are accepted universally:
Canon of Equality
Canon of Certainty
Canon of Economy
Canon of Convenience
16 Canons of Taxation
Canon of Equality: According to this canon, a
good tax is that is levied according to the tax
paying capacity of the individuals.
In other words, the burden of taxation should be
fair and just. Thus, rich people must be
subjected to higher taxation in comparison to
the poor. 17...
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- Winter '12
- The Land