The Canon of Convenience- It means that
- The literal meaning of this principle is that tax should be levied in such a manner that it should be convenient to all tax payers.
- It should not be complicated in their operation as to cause needless inconvenience and hardship to the subjects.
- It helps to ensure compliance.
The Canon of Economy – It means that
- Tax system should have economical object.
- the cost of tax collection should be minimum.
- Government must levy only the minimum tax which is necessary for the national growth.
The Canon of Certainty- It means that
- All the taxation policies ought to be certain and clear.
- when the tax is to be paid, how it is to be paid and how the amount to be paid is to be determined .
- The taxation policies should be precise .
- The tax system should be formed in such way that all persons should pay the taxes according to their capacity.
- The parties should have equal responsibility. There should be equal tax burden on all persons.
- Principles of social Justice should be followed.
- Equity refers to both horizontal and vertical equity- Horizontal equity – taxpayers with equal abilities to pay should pay the same amount of tax, Vertical equity – taxpayers with a greater ability to pay should pay more tax.
- Higher income group should contribute more than lower income group.
Main Characteristics of Taxes
- It is compulsory
- It is a form of contribution.
- It leads to public benefit.
- It has no direct benefit.
- Government has the power to levy.
- It has not the cost of benefit.
- It leads to economic growth and public welfare.
Here is notes on the introduction of taxation law-