What Is Taxation?

Taxation is when tax is imposed. Tax is the charge that is imposed on individuals or legal entities by a government or an equivalent authority. Sub national entities may also impose taxes. There are several different kinds of taxes like pool tax, capital gains tax, luxury taxes and retirement taxes. Different countries have a different system of taxation.

Public Finance deals with taxation. The collection of taxes is usually the responsibility of an agency like for instance the IRS (Internal Revenue Service) collects taxes in the USA. In England the HMRC (Her Majesty's Revenue Customs) collects taxes. The taxes collected by the governments are used to enhance public utilities, for defense purposes, for maintainance of law and order, for the operation of the government, and for the protection of property. Welfare services like improving education, healthcare, providing pensions to senior citizens, benefits to the unemployed etc.

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