Taxation
Taxation
DEFINITION;-Taxation may be defined as the act or method of imposing a compulsory levy by the government or its agency on individuals and firms or an goods and services
TAX
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DEFINITION;- TAX on the other hand is defined as a compulsory levy by the government or its agency on individuals and firms or an goods and services
🔅FEATURES/CHARACTERISTICS
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i) It is a payment made as a sacrifice
ii) Tax us meant for the general welfare of everybody
vii) It is levied by the government on its agencies
iv) It is a compulsory levy that must be paid by individual or corporate bodies.
🔅PRINCIPLES OF A GOOD TAX
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â—¼Equity
â—¼Economy
â—¼ Convenience
â—¼Revenue yield
â—¼Certainty
🔅REASONS OR WHY GOVERNMENT COLLECT TAXES
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â—¼ To raise money
â—¼To redistribute income
â—¼ To control inflation
â—¼To protect infant industries
â—¼ Prevention of dumping
🔅ECONOMIC EFFECTS OF TAXATION
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âž– âž– âž– âž– âž– âž– âž– âž– âž–
â—¼Effects on inflation
â—¼ Effects on salaries
â—¼ effects on demand and supply
â—¼ Effect on investment
🔅PROBLEMS ASSOCIATED WITH TAX COLLECTION
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â—¼ Failure to fulfill civic responsibilities
â—¼ Insecurity of tax collectors
â—¼Lack of books of account
â—¼ Failure to meet the people expectations
🔅INCIDENCE OF TAXATIONS
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MEANING;- refers to the point at which the tax burden finally rests.The burden refers to the amount paid as tax.
The incidence of burden of taxation therefore lies on the persons who finally pays the tax.
🔅TYPES OF INCIDENCE OF TAXATION
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1⃣ FORMAL INCIDENCE;- this refers to the initial effects of tax on the tax objects ie.the tax payers.It shows where the initial burden of taxation lies
2⃣ EFFECTIVE INCIDENCE;- It makes reference to who bear the final burden of taxation with the reference to direct taxes,the payers bears the full burdens of tata
🔅TYPES OF TAX
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1⃣ DIRECT TAX;- As the name implies refers to the type of tax impose directly on income of individuals or organizations by the government or its agencies
Example wages,salaries, points,rents and interest
🔅TYPES OF DIRECT TAX
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i) Personal tax
ii) Company tax
iii) Poll tax
iv) Capital tax
Vii) Capital gain tax
🔅ADVANTAGE
â—¼they are progressive in nature
â—¼Theh are non inflationary
â—¼Reduce inequality of income
â—¼ Easy estimation of revenue
🔅DISADVANTAGE
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â—¼ they reduced savings.
â—¼They discouraged investment
â—¼they are inconvenient
â—¼ They reduced purchasing power
2⃣INDIRECT TAX;-refers to taxes which are impose or levied on goods and services.
🔅Types of indirect taxes
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â—¼Import duties
â—¼ Export duties
â—¼ Excise duties
â—¼Value added tax
â—¼ sales tax
🔅ADVANTAGE OF INDIRECT TAX
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i) sources of Government revenue
ii) less burden of tax
iii) Protection of infant industries
iv) Easy and cheap to collect
🔅DISADVANTAGE
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i) High cost of collection
ii) They are inflationery in nature
vii) It could lead to land industry unrest
v) It discouraged investment
💫SYSTEMS OF TAXATION
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💠PROGRESSIVE TAX;- Is a form of tax in which the rate of tax increases ad the income, stock of wealth or value of property to be taxed increased
REGRESSIVE TAX;- Is a tax where the tax rate decrease as income increase.In this case the higher the income of a consumer the lower the rate of the tax
PROPORTIONAL TAX;- Is a form of tax in which The rate is the same,irrespective of the level of income or wealt
more notes at GCE REVISIONÂ and kawlo application