Taxation is an essential financial charge levied by any governmental body to be able to fund administrative activities. Dating back to Circa 3000 BC in Ancient Egypt and subsequently the Persian Empire back in 500 BC, taxation has served as the primary means to generating funds for Governments across the ages and regardless of democratic, monarchic, oligarchic or autocratic or even kleptocratic in nature.

It does not take a degree in rocket science for one to understand that taxation of individual income, corporate earnings and trading activities aids the state to amass enough revenue to provide the basic amenities to the people and in doing so, discharge those primary functions and responsibilities for which the public elects leaders to govern it. In layman’s terms, a Government discharges two broad functions – protection from external threats & maintenance of internal peace & harmony. The taxes paid by the people help the State in raising and equipping professional armies, which in turn protect the nation. As wars have always been expensive affairs, only economically strong nations can afford to wage them, thus establishing a causal link between taxation and national & regional security. Taxation also ensures internal peace, stability and harmony in the sense that it provides modern or state-of-the-art facilities to the people, such as educational institutions, transport facilities, healthcare institutions and also help fund the institution of the Police. More importantly, taxation aids the State to develop policies regarding industrialization and social security. It is apt to say that taxation policy gives a window into the soul of the society.

With passage of time and the advancements in technology, taxation has evolved into a multi-faceted system. With the advent of the Goods & Service Tax (GST) regime, taxation has become a compliance-based fundamental duty to be fulfilled by employed citizens liable to pay tax on their personal incomes and by corporate entities. The shifting mentality entails that collecting taxes is not just a necessary function to be discharged by the Government – it also the duty of eligible citizens to pay their taxes. Hence the process of paying and collecting taxes entails equal efforts by the tax payer as well as the tax collector, towards national development.