Tax is defined as a compulsory levy payable by an economic unit to the government without any corresponding entitlement to receive a definite and direct quid pro quo from the government. It is levied as a general exaction on one or more criteria upon individuals, groups of individuals, or other legal entities.
Tax is even levied in the market sphere, under the name of corrective tax, to correct the market failure by internalizing the externality by making seller of the product to pay a fee equal to Marginal External Cost per unit of output sold.
Bhatia (2006) explains that funds are raised by the government to finance its activities from various sources of public receipts. Few important sources include taxes, income from currency, market borrowing, sale of public assets, income from public undertakings, fees, fines, gifts and donations, etc. The governments however practice dividing its receipts into two: revenue receipts that include routine and earned items like tax receipts, donations, grants, fees, and fines etc.; and capital receipts that cover those items which are non-repetitive and non-routine variety.
As bound by the questions, delving into revenue receipts, they are further divided into tax and non-tax revenue. Going on with tax revenue, it has three sections:
a. Taxes on income and expenditures: levied on receipts of income and expenditures such as corporation tax, income tax, expenditure tax, interest tax, and similar other taxes, if any, in force.
b. Taxes on property and capital transactions: levied on specific forms of wealth and its transfers such as estate duty, wealth tax, house tax, land revenue and stamps and registration fees, etc.
c. Taxes on commodities and services: levied on...
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Bhatia, H. L. (2006). Public Finance. Delhi: Vikas Publishing House Pvt. Ltd.
Characteristics of an effective tax system. (n.d.). Retrieved April 10, 2014, from okpolicy.org: http://okpolicy.org/resources/online-budget-guide/revenues/an-overview-of-our-tax-
Deller, S. (2004). Qualities of a Desirable Tax System. Community Economics Newsletter, 1.
Department of Revenue and Customs (2013). National Revenue Report 2012-2013. Thimphu: Ministry of Finance.
Ministry of Finance (n.d.). Taxation System. Retrieved Apirl 10, 2014, from www.mof.gov.bt: http://www.mof.gov.bt/content/pageContent.php?id=34
Myrsky, M. (2003). What does a Good Tax System Require. Finland: Eastern University of Finland.
Tax Deduction at Source (TDS) (n.d.). Ministry of Finance .
Tax Reforms. (2008). Retrieved April 10, 2014, from www.bhutan2008.bt: http://www.bhutan2008.bt/en/node/60
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