Taxation

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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◼Equity

◼Economy

◼ Convenience

◼Revenue yield

◼Certainty

🔅REASONS OR WHY GOVERNMENT COLLECT TAXES
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◼ To raise money

◼To redistribute income

◼ To control inflation

◼To protect infant industries

◼ Prevention of dumping

🔅ECONOMIC EFFECTS OF TAXATION
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◼Effects on inflation

◼ Effects on salaries

◼ effects on demand and supply

◼ Effect on investment

🔅PROBLEMS ASSOCIATED WITH TAX COLLECTION
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◼ Failure to fulfill civic responsibilities

◼ Insecurity of tax collectors

◼Lack of books of account

◼ 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

◼they are progressive in nature

◼Theh are non inflationary

◼Reduce inequality of income

◼ Easy estimation of revenue

🔅DISADVANTAGE
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◼ they reduced savings.

◼They discouraged investment

◼they are inconvenient

◼ 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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◼Import duties
◼ Export duties
◼ Excise duties
◼Value added tax
◼ 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 REVISION and kawlo application