(i) Canon of equality or equity (ii) Canon of certainty (iii) Canon of economy (iv) Canon of convenience. • Modern economists have added more in the list of canons of taxation, these are: (v) Canon of productivity (vi) Canon of elasticity (vii) Canon of simplicity (viii) Canon of diversity. Page 9.
What are the underlying canons of tax reforms?
Perhaps one needs to go back to the four basic canons of taxation enunciated by noted economist Adam Smith and author of The Wealth of Nations (1776), viz., equity (taxes must be based upon the ability to pay); certainty (the timing and amount must be certain); convenience (means and timing of payment must be …
Who gave us four canons of taxation?
Adam Smith laid down four principles to guide the taxing authority. Adam Smith’s Canons: The principles or canons of taxation enunciated by Adam Smith were so important that they have become classic.
What is the meaning of canons of taxation?
Meaning of Canons of Taxation: By canons of taxation we simply mean the characteristics or qualities which a good tax system should possess. In fact, canons of taxation are related to the administrative part of a tax. Adam Smith first devised the principles or canons of taxation in 1776.
What is the canon of certainty in taxation?
(2) Canon of Certainty: This canon of taxation suggests that the tax which an individual has to pay, should be certain and not arbitrary. It should be certain to the lax payer how much tax he has to pay, to whom and by what time the tax is to be paid. The place and other procedural information should also be clear.
What are the four canons of Smithian taxation?
Even in the 21st century, Smithian canons of taxation are applied by the modern governments while imposing and collecting taxes. In this sense, his canons of taxation are, indeed, ‘classic’. His four canons of taxation are: (iv) Canon of convenience. Modern economists have added more in the list of canons of taxation. (viii) Canon of diversity.
Which is the best canon of taxation in economics?
It will enable the tax payer to manage his income and expenditure. The Government will also be benefited by this principle. (3) Canon of Convenience or Ease: According to this canon of taxation, every tax should be levied in such a manner and at such a time that it affords to the maximum of convenience to the tax payer.
