Q.(a) Describe Canons of Taxation.

(a) A good tax system follows canons such as equality, certainty, convenience and economy (Adam Smith) plus productivity, elasticity, simplicity and diversity. (b) Water pollution arises from industrial, domestic, agricultural and other waste entering water bodies.

(a) Canons of Taxation:

Canons of taxation are the principles a good tax system should follow. Adam Smith's four canons are:

1. Canon of Equality (Ability): Every person should pay tax according to his ability to pay; the rich should pay more than the poor.
2. Canon of Certainty: The amount, time and manner of payment of tax should be clear and certain to the taxpayer, not arbitrary.
3. Canon of Convenience: The tax should be levied at a time and in a manner most convenient to the taxpayer (e.g., income tax deducted when income is received).
4. Canon of Economy: The cost of collecting the tax should be as low as possible, so that most of the revenue reaches the treasury.

Other (modern) canons added by later economists:

5. Canon of Productivity: The tax should yield sufficient revenue to the government.

6. Canon of Elasticity: Revenue should be capable of increasing or decreasing with the needs of the government.

7. Canon of Simplicity: The tax system should be simple and easily understood.

8. Canon of Diversity: There should be a variety of taxes so that all classes contribute.

9. Canon of Flexibility: Taxes should be adjustable to changing conditions.

(b) Causes of Water Pollution:

1. Industrial effluents: Factories discharge chemicals, dyes, acids and heavy metals into rivers and lakes.
2. Sewage and domestic waste: Untreated sewage and household waste-water carry harmful bacteria and organic matter into water bodies.
3. Agricultural run-off: Fertilisers, pesticides and insecticides washed from fields pollute water and cause excessive algae growth (eutrophication). …