MANAGEMENT

Detailed explanation-1: -Basically a sound tax system should satisfy all the professed canons of taxation. It should be able to generate sufficient revenue, fulfill the socio-economic objectives, would not hamper the productive system of the economy, to become an ideal one.

Detailed explanation-2: -A good tax system should meet five basic conditions: fairness, adequacy, simplicity, transparency, and administrative ease.

Detailed explanation-3: -Administrative feasibility refers to the likelihood that a department or agency can implement the policy or deliver the program well. It entails an assessment of a department’s or agency’s capacity, a projec-tion of available resources and agency behavior that may be difficult to estimate.

Detailed explanation-4: -The principles of good taxation were formulated many years ago. In The Wealth of Nations (1776), Adam Smith argued that taxation should follow the four principles of fairness, certainty, convenience and efficiency.

Detailed explanation-5: -The principles of a sound tax system are fiscal adequacy, administrative feasibility, and theoretical justice. Fiscal adequacy means the sources of revenue must be sufficient to meet government expenditures and other public needs.