Meaning, Definition and Features of Tax

MEANING:-

            Taxation is the single biggest source of public revenue. This source of income is very important for the government because the funds raised from taxes are used to meet all expenditure. Taxes are charged on the property, income and even at the time of purchasing commodities. Payment of tax is a legal duty of the citizens. Public authorities require huge amount of resources to finance it's operations. Public revenue refer to the revenue, which can be fetched by the public authority in a given period usually a year. The main sources of public revenue are:-

(a)       Taxation

(b)       Fees

(c)       Prices

(d)       Fines and Penalties

(e)       Special Assessment

(f)        Public Borrowing or Public Debts

            In this, we shall deal will taxation's detail :-

            Taxation is an important tool of modern governments in order to raise money to meet expenditure on various public service. legal duty of the citizens is to pay taxes. It may be on their property, income and at the time of purchasing a commodity. Tax constitutes the major sources of a government's income.

DEFINITION :-

            According to Hugh Dalton, "A tax is a compulsory contribution imposed by the public authority irrespective of exact amount of services rendered to the tax payer in return and not imposed as a penalty for any legal offence."

            According to F. W. Taussig, "The essence of tax as distinguished from other changes by the the government, is the absence of a direct quid-pro-quo between the tax payer and the public authority.

FEATURES/ CHARACTERISTICS :-

1.  Compulsory Payments :- Tax is not a voluntary contribution but a compulsory payment. If defined, it is considered an offence subject to legal action. No one has any right to challenge tax levied by the government.

2. Imposed By The Government :- Tax is an imposition on a person by the government. Only the government decides the tax system. It is not kind of donation but something that lies in the jurisdiction of a government.

3.  Payment For The Common Welfare :- Everyone receives the benefit provided by a government through expenditure including those who never pay tax. Revenue received as tax, is spent in the interest of public welfare.

4.  No Proportionate Relationship Between Tax And Benefit :- It is not necessary that a tax payer may receive benefit from the government in proportion to the amount of tax paid by him.

5. Not A Penalty :- Tax is not a penalty or punishment for any legal offence nor is it imposed for disobeying statutory laws.

6. Tax Adversely Affects The Monetary Condition Of A Tax Payer :- Tax reduces the monetary purchasing power of a tax payer, which diminishes his standard of living and adversely affects his efficiency to work.