History of Tax

Abstract

Is tax a means of extracting money from the people by the government, or is it a fee we pay for the privilege of living in an organised society? The trite point at issue is that taxes represent a payment imposed by governments to raise funds. Tax evasion is a form of resistance to mandatory taxation. Tax is a cultural phenomenon. While British income tax represents the vanguard of modern tax, the first known records of tax date back to Ancient Egypt in the reign of King Scorpion I. A tax is rarely rescinded, however, there are historical records of such practices. VAT is a modern tax but sales tax and customs duties date back to the Roman Empire. VAT, first devised in post WWI Germany to replace ‘cascading’ turnover tax, has evolved into a multi-stage VAT system. In the 1960s less than ten countries had adopted VAT. Today technology and globalisation have precipitated the dissemination of VAT to more than 130 countries. The technological revolution has compelled a re-examination and ‘reconceptualisation’ of traditional principles of taxation and application, and has engendered the challenge of implementing and enforcing an international taxing regime subject to the authority of international organisations, for example, the OECD.