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Pros And Cons Of Canon Of Taxation

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The principle of Canons of taxation is a good tax system and the tax on consumption can be shifted by the tax liable individual to another person. In the canon of taxation, a good tax system should satisfy some condition. Firstly is canon of equity which is the tax payment should be proportional to income. Next is canon of certainty. The manner of payment and amount to be paid should be clear and paid to the taxpayer. Thirdly is convenience of payment. Taxes should be collected at a time and in a manner convenient for taxpayer. Lastly is canon of economy which means the taxes should not be expensive to collect and not discourage business.
In the developing country, they are usually introduced the consumption tax and it can be a challenge where …show more content…

For example, a poor person has to pay the tax on good or service that consumed even though he or she has no income. Whereas compare to canon of equity, this is require the burden of taxation to be distribute according to the taxpayer ability to pay as measure by the income earned which means that rich people should pay more tax and poor people pay less. Apart from that, a difficulty of administering tax on consumption is that the amount to be collected is unclear and makes planning by the state difficult whereas under the canon of certainty that the tax on income is clear to the state which helping financial …show more content…

Firstly is canon of equity, it is require the taxable person should pay to the government depend on their ability to pay. The rich people should pay more taxes because without the protection of the government authorities, they cannot earn and enjoy their income. Next is canon of certainty, tax payer must have the full knowledge in how much and when they need to pay the tax to the government. Thirldy is cannon of convenience which the tax system must be easy and convenienet for taxpayer to use and increase tax revenue. Lastly is canon of economy. The tax system should not be exorbitant but be the minimum. However, this canon is important because it is collecting the tax as minimum as possible. For example, if the canon of economy is not applied, the overall cost of collecting tax will be unreasonably high and the collected amount will not be sufficient. Every tax has to be contrived as both to take and keep out of the pockets of the people as little as possible over and above what it brings into the public treasury of the

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