Question

Write short notes on Principle of equity of Taxation.

Answer 1

Taxation. In public finance, vertical equity is the idea that people with a similar ability to pay taxes should pay the same or similar amounts. It is related to the concept of tax neutrality or the idea that the tax system should not discriminate between similar things or people, or unduly distort behavior.

Answer 2

It then sets out four principles of taxation (simplicity, neutrality, stability and flexibility), and three broad methods of taxation (income, wealth and consumption). 3.2 These are all linked.