SCOPE, IMPORTANCE AND OBJECTIVE OF

TAXATION

CONTENT

• Definition of Taxation

• Objective of Taxation

• Importance of Taxation

• Purpose of Taxation

• Scope of Taxation

Definition of Taxation

Taxation ( General) : It is an system of compulsory contributions levied by a

government or other qualified body on people, corporations and property in order to fund public expenditures.

International taxation It is the study or determination of tax on a person or business

subject to the tax laws of different countries or the international aspects of an individual country's tax laws.

Objectives

• To Increase the effectiveness and productivity of the nation • To Increase the quantum of revenue collection • To Improve in services of the government • To Improve employment at all industry verticals • To Induct a modern technology in to the system • To Rationalize terms and condition of the economic system • To Rationalize of employment terms and conditions

Importance/purpose

Taxation can be important for social and economic policy

The fundamental purpose of taxation is to finance government expenditure.

Imposing a tax may potentially increase efficiency if markets fail to price factors such as pollution or congestion, or the health costs of particular types of behaviour

Act as a way to shift some of the wealth from those with much to those with less.

To run the state

General Tax Incentives for Industries:

• 100% deduction of profits and gains for ten years is available in respect of the following:

Any enterprise carrying on the business of developing, maintaining and operating infrastructure facilities viz., roads, highways, bridges, airports, ports, rail systems, industrial towns, inland waterways, water supply projects, water treatment systems, irrigation projects, sanitation and sewage projects, solid waste management systems.

Undertakings engaged in generation or generation and distribution, transmission or distribution of power

Any company engaged in scientific and industrial research and development activities, approved by the prescribed authority

100% deduction for seven years for undertakings producing or refining mineral oil.

Scope• Raising of funds from individual and organization by the state

• It can be two types:Direct taxIndirect tax

• Further, it is sub-divide into major groups like - Income tax Wealth tax Gift tax Expenditure tax Interest tax

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