What Is Taxation?

The term 'taxation' comes from Latin word 'Taxatio'. It means to determine the payable income quantum of estimate. Taxing authority determines tax to be payable by the assessee. So tax is the revenue collected by the government from persons and organizations under different taxing Acts. In other words, it is a liability imposed upon a assessee who may be individuals, groups of individuals and other legal entities.

According to Justice Holmes - "The price paid to the government for living in a civilized society is the tax."

According to Taylor - "Taxes are the compulsory payments to government without expectation of direct benefit to the tax payer."

That is, it is not a price paid by the tax-payer for any definite service from the government but no tax-payer has a right to any expenditure on the ground that is paying a tax. The benefits of public expenditure may go to anyone irrespective of the taxes paid. Hence, a tax is said to be a generalized exaction (E.F Plank). Thus plank definite tax as as "Taxes are general compulsory contribution of wealth, levied upon personal-natural or corporate, to defray the expenses incurred in conferring common benefit, upon the resident of the state." Here it may be noted that a public receipt containing an element of compulsion does not automatically become a tax. In order to be a tax, the absence of a quid pro quo is necessary. As we shall see, the element of compulsion exists  in case of some other public receipts also. Thus to be tax both compulsion and no benefit elements are to be present.