Answer to Question #214718 in Microeconomics for Lweli

Question

The South African government depends on the South African Revenues Services (SARS) for the
collection of tax revenue for the ever increasing public expenditure. COVID-19 made all government
sof the world over to resort to lockdowns to curb the spread of the disease. The lockdowns have a
direct effect of reducing business activities and hence, decrease in revenue collections. Citizens
willingness to pay tax largely depends on the perceptions the public have on the tax system,
Critically discuss any 7 requirements of a good tax system

Answer 1

1. Equity and fairness: A good tax system should ensure that people should tax the same way in comparable situations. I.e., taxpayers with equal capacity to pay should pay the same amount of taxes and taxpayers with a greater ability to pay should pay more taxes.
2. Transparency and visibility: Taxpayers should be aware of how and when tax is levied on them and others
3. Economic growth and efficiency: A tax system should be consistent with the economic goals of the taxing authority.
4. Certainty: Tax regulations should clearly explain how a tax is to be paid and how the amount is calculated to assure people the tax is computed accurately. 
5. The economy of calculation: Tax collection expenses should be maintained to a bare minimum for both the government and the taxpayer.
6. Appropriate government revenues: A tax system should enable the government to predict how much tax revenue it likely will collect.
7. The convenience of payment: A tax should be due at a time or in a manner most likely to be convenient to the taxpayer.