Is the term by which governments finance their expenditure by imposing charges on citizens and corporate entities.Governments use taxation to encourage or discourage certain economic decisions.
Taxation Principles :
Basic concepts by which a government is meant to be guided in designing and implementing an equitable taxation regime. These include:
Adequacy : Taxes should be just-enough to generate revenue required for provision of essential public services.
Broad Basing : Taxes should be spread over as wide as possible section of the population, or sectors of economy, to minimize the individual tax burden.
Compatibility : Taxes should be coordinated to ensure tax neutrality and overall objectives of good governance.
Convenience : Taxes should be enforced in a manner that facilitates voluntary compliance to the maximum extent possible.
Earmarking : Tax revenue from a specific source should be dedicated to a specific purpose only when there is a direct cost-and-benefit link between the tax source and the expenditure, such as use of motor fuel tax for road maintenance.
Efficiency : Tax collection efforts should not cost an inordinately high percentage of tax revenues.
Equity : Taxes should equally burden all individuals or entities in similar economic circumstances.
Neutrality : Taxes should not favor any one group or sector over another, and should not be designed to interfere-with or influence individual decisions-making.
Predictability : Collection of taxes should reinforce their inevitability and regularity.
Restricted exemptions : Tax exemptions must only be for specific purposes (such as to encourage investment) and for a limited period.
Simplicity : Tax assessment and determination should be easy to understand by an average taxpayer.
Real Property Tax :
A property tax on local real estate that is calculated according to the fair market value of the real estate. That is, a real property tax is assessed as a percentage of the amount for which the owner would be able to sell the property in the current market. As a result, real property taxes increase when the local property market is bullish and decline when it is bearish.
Note:- The above said things are liable to change as per Government Laws.