Definition of Tax by Different Authors. The term ’tax’ has been derived from the French word ‘taxe’ and etymologically, the Latin word ‘taxare’ in related to the term ‘tax’, which means ‘to charge‘. Tax is a contribution exacted by the state. It a non-penal but compulsory and unrequited transfer of resources from the private to the public sector, levied on the basis of predetermined criteria.
Taxes are the mod important source of revenue for modern governments. It is a compulsory levy, to be paid by the citizens who are liable to pay It. imposed by the government. Many economists like Edwin Robert Anderson Seligman, Adam Smith, Bastable, Taussig, and Dalton hold the unanimous opinion that tax is a compulsory payment to the government by the taxpayer without any expectation of some specified return.
But the essence of the argument is this that the taxpayer is not entitled to claim the return of his taxes though he may receive benefits of the service which the State provides by means of the taxes collected from him and many others hire him.
Definition of Tax by Different Authors.
The followings are the various definitions of tax given by different economists:
As per Section 2(62) 0/ the ITO 1984,
”’tax” means the inane tux payable under the ordinance and includes any additional tax, excess profit tax, penalty, interest, fees or other charges leviable or payable under this ordinance’
According to Leroy Beaulieu,
”A tax is purely and simply a contribution, whether direct or masked which the public authorities impose upon the inhabitants or good for the purpose of defraying government expenditure.’
According to Dalton,
”A tax is a compulsory contribution imposed by a public authority irrespective of the exact amount of service rendered to the taxpayer in return and not imposed as a penalty for any legal offense.”
According to P. E. Taylor,
“Taxes are compulsory payment to the government without expectation of direct return in benefit to the taxpayer.‘
The legal definition and the economic definition of taxes differ in some ways such as economists do not regard many transfers to governments as taxes. For example, some transfers to the public sector are comparable to prices. Examples include tuition at public universities and fees for utilities provided by local governments. Governments also obtain resources by “creating” money and coins (for example, by printing bills and by minting coins), through voluntary gifts (for example, contributions to public universities and museums), by imposing penalties (such as traffic fines), by borrowing, and also by confiscating wealth. From the view of economists, a tax is a non-penal, yet compulsory transfer of resources from the private to the public sector, levied on a basis of predetermined criteria and without reference to specific benefit received.
In modern taxation systems, governments levy taxes in money; but in-kind and corvée taxation are characteristic of traditional or pre-capitalist states and their functional equivalents. The method of taxation and the government expenditure of taxes raised is often highly debated in politics and economics. Tax collection is performed by a government agency such as the Ghana Revenue Authority, Canada Revenue Agency, the Internal Revenue Service (IRS) in the United States, Her Majesty’s Revenue and Customs (HMRC) in the United Kingdom or Federal Tax Service in Russia. When taxes are not fully paid, the state may impose civil penalties (such as fines or forfeiture) or criminal penalties (such as incarceration) on the non-paying entity or individual.
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