The tax revenue is the most important source of public revenue. A tax is a compulsory payment levied by the government on individual or companies to meet the expenditure which is required for the public welfare. According to Hugh Dalton, “a tax is a compulsory contribution imposed by a public authority, irrespective of the exact amount of service rendered to the taxpayer in return, and not imposed as penalty for any legal offence” A good tax system is one which is designed on the basis of an appropriate set of principles. The tax system should strike a balance between the interest of the taxpayer and that of tax authorities.
Is a Tax Contributory Factor to Pakistan Society?
Yes, Tax is a contributory factor of Pakistan society because on an individual level the importance of taxes isn’t significant. Although it would be extremely unwise to not pay taxes the actual benefits to paying taxes are so that local, state and federal governments have a source of revenue to pay for roads, police, firemen, schools, social security, military, medicare and so forth. The constitution states all taxes in the Pakistan must be uniform. So everyone in the country must pay the same tax. A amendment was made how ever to allow for a income tax which the supreme court previously found to be unconstitutional. But the Uniform tax limitation still exists. Taxes are how the us government pays for everything, including paychecks, food stamps, the military, air force one, and all bills passed by congress. The importance of tax are as follows:-
1. Maximum social advantage.
2. Minimum aggregate sacrifice.
3. Efficient administrative system.
4. Help in economic development.
5. Universally applicable.
6. Built in flexibility.
In developing countries, including, Pakistan, the establishment of effective and efficient tax system faces some formidable challenges. The first of these challenges is structure of economy that makes it difficult to impose and collect certain...