taxation(redirected from Federal Tax)
Also found in: Dictionary, Thesaurus, Legal, Encyclopedia.
taxationthe government receipts from TAXES on personal and business income, expenditure and wealth. Taxes on income include personal INCOME TAX and CORPORATION TAX; taxes on expenditure include VALUE-ADDED TAX and EXCISE DUTIES. Taxes are used to finance government spending and as instruments of FISCAL POLICY in regulating the level of total spending in the economy. See INLAND REVENUE, BUDGET (GOVERNMENT).
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson
taxationgovernment receipts from the imposition of TAXES on persons’ and businesses’ income, spending, wealth and capital gains, and on properties. Taxes are used by the government for a variety of purposes, including:
- to raise revenue for the government to cover its own expenditure on the provision of social goods such as schools, hospitals, roads, etc., and social security payments made to individuals in respect of unemployment, sickness, etc. (see BUDGET, GOVERNMENT EXPENDITURE);
- as an instrument of FISCAL POLICY in regulating the level of total spending (AGGREGATE DEMAND) in the economy (see DEMAND MANAGEMENT);
- to alter the distribution of income and wealth (see PRINCIPLES OF TAXATION, REDISTRIBUTION OF INCOME);
- to control the volume of imports into the country (see BALANCE OF PAYMENTS EQUILIBRIUM).
Taxation takes two main forms:
- taxes on income received by individuals and businesses (referred to as DIRECT TAXES – INCOME TAX, NATIONAL INSURANCE CONTRIBUTION, WEALTH TAX, CAPITAL GAINS TAX and CORPORATION TAX);
- taxes on expenditure by individuals and businesses (referred to as INDIRECT TAXES - SALES TAX, VALUE-ADDED TAX, EXCISE DUTY and TARIFF). In national income analysis, taxation is a WITHDRAWAL from the CIRCULAR FLOW OF NATIONAL INCOME. See PUBLIC FINANCE, INLAND REVENUE.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005