1.

Taxation

Means by which governments finance their expenditure by imposing charges on citizens and corporate
entities. Although, principally, taxation should be neutral in its effects on the different sectors of an economy,
governments use it to encourage or discourage certain economic decisions. For example, reduction in taxable
personal (or household) income by the amount paid as interest on home mortgage loans results in greater
construction activity, and generates more jobs. See also taxation principles.

2. tax (from the Latin taxo; "I estimate") is to impose a financial charge or other levy upon a taxpayer
(an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay is
punishable by law.

3. Essential characteristics of tax:

1. enforced contribution.

2. Generally payable with money.

3. proportionate in character.

4. levied on persons or property

5. levied by the state which has jurisdiction mover the subject

6. levied by the law-making body of the state.

7. commonly required to be paid at regular periods or intervals.