Taxation:

A tax is a compulsory levy payable by individuals and business organizations to the government without receiving any definite corresponding service or good directly from the government i.e. without quid pro quo.

Elements In A TAX

There are three elements in a tax, the base, the rate, and the yield.

(a) Tax Base: This is the object being taxed. For example, in personal income tax, the tax base is the taxpayers income (salary), while in value added tax (VAT), taxpayers expenditure is the tax base.

(b) Tax rate: This refers to the proportion of the tax base which is paid in tax. It is usually expressed as a flat rate (lump sum) or as a percentage.

(c) Tax Yield: It is the amount of revenue received by the government from tax.