1* 2*Taxation ----When the government takes money from your income to pay debts and construction: taxes.

---- is when the government takes a certain amount of its citizens' money in order to provide services, raise an army, or other such thing. taxation is used to pay off for most part national debt on interest incurred by banks who lend money to government's' in other words they control the country. *A means by which governments finance their expenditure by imposing charges on citizens and corporate entities. Governments use taxation to encourage or discourage certain economic decisions. For example, reduction in taxable personal (or household) income by the amount paid as interest on home mortgage loans results in greater construction activity, and generates more jobs. See also taxation principles. *What is the purpose of taxation? The primary purpose of taxation is to raise revenue for the government. The income tax, or the tax paid on personal or corporate income, is the primary vehicle for collecting this revenue. Besides raising revenue, another important objective of the income tax is to collect revenue in a manner that reduces existing wealth disparities between the lowest and highest income tax brackets, often called the governments redistribution of wealth policy. Finally, taxation is used to encourage a capitalist economy; since tax laws allow deductions for business expenses, they encourage individuals and companies to expand production, invest in advertising, and hire staff, all of which contribute to the economy. What is the essential characteristics of taxation? 1. enforced contribution. 2. Generally payable with money. 3. proportionate in character. 4. levied on persons or property 5. levied by the state which has jurisdiction mover the subject 6. levied by the law-making body of the state. 7. commonly required to be paid at regular periods or intervals.

What is tax evasion? Intentional avoidance of tax payment usually by inaccurately declaring taxable income. Tax avoidance is the legal utilization of the tax regime to one's own advantage, to reduce the amount of tax that is payable by means that are within the law. The term tax mitigation is a synonym for tax avoidance. Its original use was by tax advisors as an alternative to the pejorative term tax avoidance. The term has also been used in the tax regulations of some jurisdictions to distinguish tax avoidance foreseen by the legislators from tax avoidance which exploits loopholes in the law. The United States Supreme Court has stated that "The legal right of an individual to decrease the amount of what would otherwise be his taxes or altogether avoid them, by means which the law permits, cannot be doubted." Tax evasion, on the other hand, is the general term for efforts by individuals, corporations, trusts and other entities to evade taxes by illegal means. Both tax avoidance and evasion can be viewed as forms of tax noncompliance, as they describe a range of activities that are unfavorable to a state's tax system.[1

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