A tax is a compulsory payment to be made by an individual or a company to the government on the basis of certain well-established rules or criteria such as income earned, property owned or expenditure made. Those who pay taxes do not get any direct benefit from the government in exchange. The revenue from tax is used by the government to cover various types of expenditure and for the benefit of the whole community and not just for that of the taxpayers. This implies that a taxpayer— be it an individual or a firm — can­ not expect or demand any specific service from the government in exchange for the tax paid. The main purpose of taxation—taxes income, wealth and consumption expenditure—is to raise rev­enue so that the government can perform certain useful functions (duties) such as providing for defence and helping poor and old citizens as also small farmers.

Jincy Anna Joy

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