3 Criteria For Effective Taxes
xi Of import Requirements of a Good Revenue enhancement Structure
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1. Equity:
The distribution of the tax burden should exist equitable. Everyone should exist made to pay his or her 'fair share'.
2. Neutrality:
Taxes should be chosen so as to minimise interference with economic decisions in otherwise efficient markets. Such interferences impose 'backlog burden' which should be minimised.
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3. Efficiency:
Where taxation policy is used to achieve other objectives such as to grant investment incentives, this should be done and then as to minimise interference with the equity of the system.
4. Certainty:
The tax which each individual is bound to pay ought to be certain and not capricious. The time of the payment, the way of payment, and the quantity to be paid, all ought to be clear and manifestly to the contributor, and to every other person.
v. Economy:
Every revenue enhancement ought to be so contrived as to both accept out and continue out of the pockets of the people equally fiddling equally possible over and above what information technology brings into the public treasury of the land. Administration and compliance costs should be as low as is compatible with the other objectives.
half dozen. Simplicity:
The revenue enhancement system should permit off-white and non-capricious administration and information technology should exist understandable to the tax-payer. It means that the tax-system should be hands comprehensible to the tax-payer, i.e., its nature, method and ground of estimation should all be hands followed by each tax-payer.
7. Convenience:
Every tax ought to be levied at the fourth dimension, or in a manner in which information technology is most likely to exist user-friendly for the contributor to pay information technology.
8. Productivity:
A tax organization to be thoroughly sound and indelible must be able to generate enough acquirement to meet the requirements of the government.
9. Elasticity:
In the arrangement, in that location should exist a capacity to answer quickly to the changes in the demand for revenue.
10. Diverseness:
The tax system should be such that information technology depends on a number of taxes, so that every grade of citizen may be chosen upon to contribute something towards the land revenue.
11. Financial Objectives:
The revenue enhancement structure should facilitate the apply of fiscal policy for stabilisation and growth of objectives.
3 Criteria For Effective Taxes,
Source: https://www.yourarticlelibrary.com/economics/11-important-requirements-of-a-good-tax-structure/2782
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