Meaning and definition of a tax
A tax is one of the important sources of public revenue. A
tax is a compulsory charge or payment levied by the government on an individual
or corporation. Therefore an element of compulsion is involved in taxation.
Other sources of public revenue are excluded from this compulsory element.
There is no direct give and take relationship between a taxpayer and the
Definition of a tax
According to Prof. Seligman, 'A tax is a compulsory
contribution from the person to the State to defray the expenditure incurred in
the common interest of all without any reference to the special benefits
the words of Dalton, 'A tax is a compulsory contribution imposed by the public
authority, irrespective of the exact amount of service rendered to the
taxpayer, in return for which no specific and direct quid pro quo is rendered to the payer'.
From these definitions, it is clear that tax is a compulsory
contribution. It means that the State has the right to tax. Refusal to pay the
tax is punishable. The phrase 'without quid
pro quo' means the absence of direct and proportional benefit to the
taxpayer from the government.
Canons of Taxation
Canons of taxation are considered as fundamental principles
of taxation. Adam Smith laid down the following canons of taxation:
Canon of equity
Canon of certainty
Canon of convenience
Canon of economy