Q.Describe the canons of Taxation.

Adam Smith's canons of taxation are equality, certainty, convenience and economy; later writers added productivity, elasticity, simplicity and diversity.

Canons of Taxation (Adam Smith's four main canons):

1. Canon of Equality — every person should pay tax according to his ability to pay (equity/justice in taxation).
2. Canon of Certainty — the amount, time and manner of payment of a tax should be clear and certain to the taxpayer.
3. Canon of Convenience — the tax should be collected at a time and in a manner most convenient to the taxpayer (e.g. income tax deducted at the time of receiving salary).
4. Canon of Economy — the cost of collecting the tax should be as small as possible so that most of the revenue reaches the government. …