2.2.1.2. Meaning of Taxes

Taxes can be defined as a “compulsory contribution from a person to the government to defray the expenses incurred in the common interest of all, without reference to special benefits conferred”.

The nature of taxes can be explained in terms of the following four characteristics

♤ Compulsory contribution – No one can refuse to pay taxes as refusal attracts legal action and punishment

♤ Personal obligation – It imposes an obligation to pay taxes

♤ General benefit – Taxes are used for the general benefits and welfare of the people

♤ No quid pro quo – A tax payer does not receive a definite, direct and proportional benefit from the government.