Taxation Advice System

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Taxation Advice System
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It is important for the government to put certain
principles into consideration while setting up
taxation systems so that they can be in a
position to serve their people well. There are
many principles or taxation advice of taxation
that have been developed from years, but all over
the world there are four principles that are
known to many economists.
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Efficiency Principle

• This main principle of taxation is one which
  state that the totals cost of collecting taxes
  should not be too much that leads in making the
  taxation system.
• The discussed costs can be divided into the
  administrative costs and the compliance costs.
• The Administrative costs generally aims at making
  sure that the government plays its role, such as
  employing of the tax officials, the cost of
  printing forms, and so on.
• On the other side, the compliance costs are those
  that is incurred by the taxpayer in a bid to
  ensure that the taxes are paid.

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Equity Principle

• Equity is the second most important principle of
  taxation.
• This principle stipulates that the taxation
  advice system should be in a manner in which the
  wealth is redistributed to the poor from the
  rich, so that people can pay taxes according to
  their abilities.
• This principle is something that in many
  countries has brought about the progressive type
  of taxation system.

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Flexibility Principle

• Flexibility is the third principle of taxation.
• A tax system needs to be quite flexible than
  rigid so that if there are any type of changes
  occurring in the economy that might lead to
  change in the tax laws, it would become quite
  easy to do changes.
• It becomes difficult to run a tax system where
  you find difficulty in making changes to
  legislation.

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Certainty Principle

• Certainty is the last principle of taxation that
  we shall be looking at.
• A good taxation system needs to be firm so that
  one can easily predict how the situation will be
  in coming few years.
• The taxation advice system should not be fluid
  despite the fact that it should be flexible to
  allow changes.
• This is very much necessary as it creates a sense
  of stability especially to the investors.

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Contact Details

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