Chief Commissioner of Income Tax This is ‘sumptuary taxation’. Profit from public undertakings run on a monopoly basis also can be included in the category of commercial revenue. A tax is levied as a part of a common burden. The implementation of the Act lies in the hands of these authorities. The development of the principles of taxation is essentially an application of the theory of economic welfare. Thus there are different sources of income of a government. It may be military aid, economic aid etc. A tax is a leakage from the circular flow of income into the public sector. Thus a fee is a payment charged by the government to bear the cost of administrative service rendered by the government. Many advanced countries and international funding agencies like World Bank, IMF, etc. Income Tax Authorities are also granted power to survey and order persons to submit certain information. JURISDICTION OF INCOME TAX AUTHORITIES SECTION 120 • 1) Income-tax authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, as the case may be, assigned to such authorities by or under this Act in accordance with such directions as the Board may issue for the exercise of the powers and performance of the functions by all or any of those … %%EOF Report a Violation 10. It refers to the claim of the state to the property of persons who die without legal heirs or documented will. Image Guidelines 4. He say “from the standpoint of view of the state, a tax is a source of derivative revenue, from the angle of the citizen a tax is a coerced payment, from the administrative point of view it is a demand for money by state in conformity to established rules from the point of view of theory a tax is a contribution from individuals for common expenditure. In this context, Adam Smith observes “the subjects of every state ought to contribute towards the support of the government as nearly as possible, in proportion to their respective abilities that is in proportion to the revenue which they enjoy under the protection of the state”. The payment of fee legalizes some action. Principles. sale of fertilizer manufactured by a government factory. What are the types of income tax authorities in India ? But it is absent in price. Lerner observes “taxation should never be imposed merely as a means of raising money for the government, but to leave less in the hands of the tax payer”. Certain public improvements, such as the construction of streets and sewers, confer specific benefit upon particular property owners in addition to their general community benefits. 520 0 obj <> endobj Adam Smith was probably the first writer to attempt a general statement of the principles or canons which should govern any sound system of taxation. 0 In accordance with the Income Tax Act, 2015 (Act 896), any investment income and capital gains with Ghanaian source are subject to tax in Ghana in the case of non-residents. Tax evasion is the illegal evasion of taxes by individuals, corporations, and trusts.Tax evasion often entails taxpayers deliberately misrepresenting the true state of their affairs to the tax authorities to reduce their tax liability, and it includes dishonest tax reporting, such as declaring less income, profits or gains than the amounts actually earned, or overstating deductions. in a country. These policies provide set of tools to the tax authorities and such tools are used for remedying economic and social ills of the society such as income inequalities, regional disparities, and unemployment and infrastructural decays. The power of taxation is mainly to be used for collecting revenue to the state. This canon states that “every tax ought to be levied at the time or on the manner in which it is most likely to be convenient for the contributor to pay it. Taxation by definition involves compulsion. The time of payment, the manner of payment, the quantity to be paid ought all to be clear and plain to the contributors and to every other person”. It may also resemble a monopoly price, since it is charged by the public authority to prohibit rendering the same service by any other than itself. Each source has its own importance in the revenue base of a government. The meaning is that the primary obligation to pay the tax is a personal obligation. Mercantilists and physiocrats advanced doctrines of tax principles. The best examples are the registration fee for motor vehicles, the payment for permit to operate automobile. FUNCTION AND POWERS OF COMMISSIONER OF INCOME TAX :- The commissioner exercises the power to control the staff of income tax department working in his jurisdiction. This income is received from public property in land, building, mine etc. This only means that when government has to meet increased expenditure, it is on taxes that it primarily relies. Hence, tax policy should aim at bringing about stability in the economy. Dalton argues that there is no substantial distinction between the British government revenue from export duties imposed on private traders and the French government monopoly profit from the sale of Tobacco; so long as the government uses its monopoly power in a public enterprises to charge high prices with a view to get large profits as a form of revenue. 3. In this case Smith observes “it is not very unreasonable that the rich should contribute to the public expense not only in proportion to their revenue, but something more than that proportion”. TOP Before uploading and sharing your knowledge on this site, please read the following pages: 1. Whereas a fee is assessed as a payment for a special privilege. Seligman emphasizes that compulsory contribution is enforced without reference to special benefits conferred. If the fee is not paid, the base of the fee or the source or purpose of the fee becomes illegal. The government can borrow from individual institutions, banks etc. A tax imposes burden on the taxpayer. An element of tax is present in fee. Administrative [ Income Tax Authorities ][ Sec. In depression, tax is set to increase the consumption and reduce the savings to increase the aggregate … Commercial Revenue and Income from Public Domain: 3. Income Tax Authorities Income Tax Act, 1961 provides for the administrative and judicial authorities for administration of this Act. But if the automobile driver does not pay the registration fee, driving of the car is made illegal. Collection of information; Power of survey; Power to call for information; Power to possess book of accounts; Power of search and seizure; Power related to discover and produce evidences Under a flexible system, a new tax can be imposed or an old tax can be withdrawn to adjust to the changed situation. Adam Smith further point out that if a scope for arbitrariness exists, then under such circumstances, even honest tax machinery will become unpopular. Prof. Lutz rightly point out that the obligation to pay tax is a personal responsibility of the taxpayer. Whereas price are charged for materials or services of business character e.g. Tax, Income Tax Officer, Special Officer or any other officer however designated appointed by the Central Board of Revenue for the purposes of this Ordinance; 2. Hence a license fee is paid in those instances in which the government authority involved; simply confer permission or a privilege to a particular person. Prof. Seligman defined special assessment as “a compulsory contribution, levied in proportion to the special benefit derived to defray the cost of a specific improvement to property, undertaken in the public interest”. The power of taxation is mainly to be used for collecting revenue to the state. Terms of Service 7. It is the duty of the state to guarantee distribution of the estates of deceased persons to heirs specified in wills, or to persons declared to be lawful heirs by courts, if no such heirs exist, the property reverts to the state. Income Tax Authorities Following are the powers and functions of all of these income tax authorities: - Selection and audit of income tax cases. This objective means that the structure of taxes and tax rates ought to be devised to generate more revenue. What is amalgamation of companies and fiscal incentives ? Finance, Public Finance, Public Revenue, Tax. Objectives of Taxation 3. The fee levied must be equal to the cost of production. There are some taxes where primary objective is to control and regulate consumption. PublishYourArticles.net is home of thousands of articles published by users like YOU. In the modern world every government use the method of raising revenue by public loans. Disclaimer 8. This is an extension of the regulative aspect of taxation. The government may resort to printing of paper money as a means of paying their bills. Writers like Prof. Lutz are of the opinion that the modern concept of taxation emphasizes positively that it should be used for the purpose of providing public revenue and that it apparently does not give a positive sanction to the use of the taxing power for the accomplishment of ulterior objects. For example, restrictions on the consumption of alcoholic liquors are effected by means of restrictive excise duties. They generally arise as a by-product of the administrative function of the government. Hence, it is very difficult to frame a comprehensive tax policy, which will help to realize the manifold objectives discussed above. 2. What is FBR The Federal Board of Revenue (More commonly known by its initials as FBR) is a semiautonomous Federal agency of Pakistan that is responsible for enforcing fiscal laws and collecting revenue for the government of Pakistan. The basic functionalpowers of income tax authority are. The amount of tax is not fixed with reference to the exact benefit which a taxpayer receives from public service. 7. This does not mean that all taxes must be levied on persons or objects of taxation. Gifts are voluntary contribution from private individual or non-governmental organizations to the government funds for specific purpose, such as relief fund or defence fund during a war or an emergency.
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