In this article we will about why taxes are collected government. Why do we pay taxes? What are taxes? Taxes are one of the most irritating thing one could feel when he/she has to give some amount from his/her earnings. We are here to discuss what is taxation and who introduced it. Before we dive into the content make sure to comment down below about your feedbacks on previous article.
Tax arises from the Greek word Tassein then it was transformed to taxare which is quiet similar to the current word Tax so we track the origin as Taxare which is a latin word. Taxes are of two types one is Direct tax which we pay directly from our income to the ruling body/government and other is Indirect tax which is to be paid on the good and services we buy or take which is further paid to Government. Now let's look from where all this started.
History of Taxation
As we already told you the origin of word Tax now let's take look on the system and algorithm of tax in History. Taxes were collected in Ancient Rome and Greece they were imposed on imported goods particularly for the royal family. Not only at these places or civilizations tax was collected in Ancient china also.
The ancient Roman taxes included taxes, duties, and taxes that were levied on the “real”. The chief of these was to pay taxes, which were paid by the citizens and which were usually taxed as head tax; later, when more money was needed, the tax base was extended to seize real estate. Average Tax was 1% at the time of Caeser. The provinces relied on their head tax and land tax; the latter included fixed debts regardless of land restitution, such as in Persia and Egypt, but later the land tax was adjusted to gain some connection with the fertility of the land, or, alternatively, one-tenth of the product is collected as a tax of ten. It is noteworthy that Rome originally had a 5 percent tax, but later ten percent; however, close relatives of the deceased were released. For a long time, taxes were levied on middle-class people, or “tax farmers,” who were in charge of collecting taxes for part of the proceeds; under Caesar's collection was given to the civil servants.
During the Middle Ages many of these ancient taxes, especially direct taxes, were replaced by a variety of mandatory services and a “service” system (many of which were gifts). The main indirect taxes were transportation duties (payment for goods passing through a particular country) and market costs. In the cities the developed concept of a universal tax liability: the tax burden on certain foods and beverages was intended to be borne by consumers and in part by producers and traders. During the Middle Ages some cities in Germany and Italy introduced a number of specific taxes: the head tax on the poor and the total value of taxes or, in some cases, the income tax of the rich. (Income tax was determined by self-examination and an affidavit taken before a community commission.) Land and property taxes increased gradually.
This all about the old Tax System now let's discuss why tax is collected and what are the reasons to collect tax.
Why are tax collected?
Direct tax is paid to the Government from the income a individual makes or when he/she buys a Property or any other asset and Indirect taxes are collected on the products and services we take from the provider and that organization adds some extra amount in it that is instructed and controlled by the Government. In different countries system of taxation is different and are planned accordingly.
Some Countries collect income tax and some countries don't collect it rather they recover it through other mediums. In some countries instead of different taxes only one tax is taken and imposed and that is called GST which is Goods & Service/Sales Tax. It is a solution for single indirect tax system. Taxes are collected to fulfill the needs of the government means to fulfill their expenditures on Development projects and in building infrastructure that's why Taxes are collected from the citizens only. VAT(Value added Tax) is also imposed on the goods in the form of subset of the indirect tax. Taxes are collected in every form whether it is hidden or open.
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