MANAGEMENT

Detailed explanation-1: -The ability-to-pay philosophy of taxation maintains that taxes should be levied according to a taxpayer’s ability to pay. The idea is that people, businesses, and corporations with higher incomes can and should pay more in taxes.

Detailed explanation-2: -They are (1) proportionate to incomes or abilities to pay (2) certain rather than arbitrary (3) payable at times and in ways convenient to the taxpayers and (4) cheap to administer and collect.” [1]

Detailed explanation-3: -In The Wealth of Nations (1776), Adam Smith argued that taxation should follow the four principles of fairness, certainty, convenience and efficiency. Fairness, in that taxation, should be compatible with taxpayers’ conditions, including their ability to pay in line with personal and family needs.

Detailed explanation-4: -In taxation: The ability-to-pay principle. The ability-to-pay principle requires that the total tax burden will be distributed among individuals according to their capacity to bear it, taking into account all of the relevant personal characteristics.