Taxation class note
of 5
Transcript of Taxation class note
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05.10.2010(Tuesday)
Tax: Taxes are general compulsory contributions of wealth levied upon persons, natural or corporate,to defray the expenses incurred in conferring common benefit upon the residents of state.
Example: Income tax, Sales tax, Excise tax, Property tax, Water tax etc.
Characteristics:
1. enforced contribution.
2. Generally payable with money.
3. Proportionate in character.
4. Levied on persons or property
5. Levied by the state which has jurisdiction over the subject6. Levied by the law-making body of the state.
7. Commonly required to be paid at regular periods or intervals.
Objectives:
1. Collection of revenue2. Redistribution of income3. Macroeconomic control4. Protection of industry5. Economic growth6. Control of consumption
Cannons or Principle of taxation:
1. Canon of Equality/Equity2. Canon of certainty3. Canon of convenience4. Canon of Economy5. Canon of productivity6. Canon of diversity7. Canon of flexibility8. Canon of social objective
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06.10.2010(Wednesday)
Classification of taxes:
i. On the basis ofincidence1. Direct Tax2. Indirect Tax
ii. On the basis of progression1. Proportionate tax2. Progressive tax3. Regressive tax
iii. On the basis of numberof bases1. Single tax2. Multiple tax
Exercise:
Amount of income(taka) Progressive Proportionate Regressive
0 1,00,000 0% 0% 0%
1,00,001 3,00,000 10% 10% 10%
3,00,001 6,00,000 15% 10% 9%
6,00,001 10,00,000 20% 10% 8%
Above 10,00,000 25% 10% 7%
Requirement:
1. Calculate the amount of taxes to be paid under each of the above system
a. The income of a person is tk. 5, 00,000
b. The income of a person is tk. 12, 00,000
Solution:
(a)For 5,00,000In case of progressive:
0 1, 00,000 = Nil
Next Tk. 2,00,000@10% = 20,000
Next Tk. 2,00,000@15% = 30,000
Total = tk. 50,000
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In case of Proportionate:
On tk. 1, 00,000 = Nil
on tk. 4, 00,000@10% = tk. 40,000
Total = tk. 40,000
In case of Regressive:
0 1, 00,000 = Nil
Next tk. 2,00,000@10% = 20,000
Next tk. 2,00,000@9% = 18,000
Total = tk. 38,000
(b)For 12,00,000In case of progressive0 1, 00,000 = Nil
Next 2,00,000@10% =tk. 20,000
Next 3,00,000@15% =tk. 45,000
Next 4,00,000@20% =tk. 80,000
Next 2,00,000@25% =tk. 50,000
Total =tk. 1, 95,000
In case of proportionate
0 1, 00,000 = Nil
Next 11, 00,000@10% =tk. 1, 10,000Total =tk. 1, 10,000
In case of Regressive
O 1, 00,000 =Nil
Next 2, 00,000@10% = tk. 20,000
Next 3, 00, 000@9% = tk. 27,000
Next 4, 00,000@8% = tk. 32, 000
Next 2, 00,000@7% = tk. 14,000
Total = tk. 93,000
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Tax System of Bangladesh
