B Com Exam > B Com Videos > Public Finance > Requirements of a sound tax system - Public revenue, Public finance
Requirements of a sound tax system - Public revenue, Public finance Video Lecture | Public Finance - B Com
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FAQs on Requirements of a sound tax system - Public revenue, Public finance Video Lecture - Public Finance - B Com
| 1. What is the importance of public revenue in a sound tax system? |  |
Ans. Public revenue is essential in a sound tax system as it provides the government with the necessary funds to finance public services and infrastructure. It enables the government to meet its expenditure requirements and implement policies that promote economic growth and social welfare.
| 2. How does a sound tax system contribute to public finance? | |
Ans. A sound tax system ensures that the government has a reliable and sustainable source of revenue to meet its financial obligations. It helps in balancing the budget, reducing fiscal deficits, and managing public debt. Additionally, an efficient tax system promotes fairness and equity by distributing the tax burden proportionally among taxpayers.
| 3. What are the characteristics of an effective tax system? | |
Ans. An effective tax system should have the following characteristics:
- Simplicity: It should be easy to understand and comply with for both taxpayers and tax authorities.
- Equity: It should distribute the tax burden fairly, based on the ability to pay.
- Efficiency: It should minimize the administrative and compliance costs while maximizing revenue collection.
- Certainty: It should provide predictability and stability in tax laws and regulations.
- Neutrality: It should not distort economic behavior or decision-making processes.
- Transparency: It should ensure that taxpayers understand how their tax liabilities are calculated and how the revenue is utilized.
| 4. How does a sound tax system promote economic growth? | |
Ans. A sound tax system can promote economic growth by encouraging investment, entrepreneurship, and innovation. It can do so by providing incentives such as tax deductions or credits for business expenses, research and development activities, and capital investments. A well-designed tax system can also create a stable business environment, attract foreign investments, and foster overall economic development.
| 5. What are the challenges in implementing a sound tax system? | |
Ans. Implementing a sound tax system involves various challenges, such as:
- Tax evasion and avoidance: Ensuring compliance and minimizing tax evasion and avoidance practices by individuals and businesses.
- Complexity: Simplifying tax laws and regulations to make them easily understandable and enforceable.
- Informal economy: Bringing informal economic activities into the tax net and expanding the tax base.
- International tax issues: Addressing cross-border tax challenges, such as transfer pricing and tax havens, to prevent tax base erosion and profit shifting.
- Political considerations: Overcoming political resistance to tax reforms and ensuring the support of key stakeholders in implementing necessary changes to the tax system.
Text Transcript from Video
hello hey I will tell you what are the
essentials of a good text system
following are the essentials of a good
text system first is equal distribution
of wealth it means a good tax system is
that which reduces the inequalities in
distribution of wealth the burden of tax
should be equal on every taxpayer second
is sufficient revenue next system should
be as such which can shield a sufficient
revenue to the government
third is based on canons of taxation
attached system should be based on
canons of Taxation its burden fall more
on rich and less on word simple attack
system should be fairly and simple it
should also be easy to administer nasty
attack system should be elastic so their
government can increase or decrease the
amount of text revenue
okay now minimum collection of cost the
cost of collection of taxes should not
be excessively ability of taxpayer rate
of tax should be according to the
ability of taxpayer such as progressive
taxation system is used Social Welfare a
good tax system is that which brings the
maximum welfare to the society diversity
they should be diversity index this term
some taxes should be direct and some
should be incorrect last is economic
stability that system should ensure the
economic stability for example during
period of boom death should be high but
in period of depression it should be low
for this purpose the progressive
accession system should be used okay
essentials of a good text system
following are the essentials of a good
text system first is equal distribution
of wealth it means a good tax system is
that which reduces the inequalities in
distribution of wealth the burden of tax
should be equal on every taxpayer second
is sufficient revenue next system should
be as such which can shield a sufficient
revenue to the government
third is based on canons of taxation
attached system should be based on
canons of Taxation its burden fall more
on rich and less on word simple attack
system should be fairly and simple it
should also be easy to administer nasty
attack system should be elastic so their
government can increase or decrease the
amount of text revenue
okay now minimum collection of cost the
cost of collection of taxes should not
be excessively ability of taxpayer rate
of tax should be according to the
ability of taxpayer such as progressive
taxation system is used Social Welfare a
good tax system is that which brings the
maximum welfare to the society diversity
they should be diversity index this term
some taxes should be direct and some
should be incorrect last is economic
stability that system should ensure the
economic stability for example during
period of boom death should be high but
in period of depression it should be low
for this purpose the progressive
accession system should be used okay
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Dec 20, 2024 Last updated |
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