10 Tax Administration principles for any tax economy – Arthashastra

pexels-photo-356830.jpeg“Arthashahtra” is an ancient Indian thesis on nation’s administration, governance, economic policies including external affairs and military tactics, written by Kautilya, widely acclaimed as “Chanakya”. The treatise date back to 3rd Century B.C, which embeds principles to efficiently administer an economy, which still holds the ground when implemented in modern-day economics.

Top 10 principles of taxation that should be followed by a well-matured tax jurisdiction are as follows:

  1. The power of the state in taxes should be limited (for example- an over aggressive tax administration would lose in the long run by way of reduction in investments)
  2. The taxation should not be burdensome
  3. Taxes should be introduced and increased gradually, only if necessary
  4. The level of taxes should be equitable and fair
  5. The taxes should yield a direct benefit to the taxpayer and the same should be visible
  6. The taxes should promote re-distribution of income
  7. Taxes should incentivize desired investments to enable growth
  8. A complete absence of taxes or exorbitant taxes should be discouraged
  9. A tax structure that ensures compliance should be devised
  10. The tax administration should be answerable to taxpayer

One may like to give the above-mentioned points a thought and deliberate of their country holds such tax principles high. What tax change would you like to see in your country? Would be happy to receive your feedback and comments by clicking the tab below.

Thank You

Akshay Kenkre

akshaykenkre@gmail.com

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