The word Tax and Taxation have been used interchangeable to mean the same thing. This is not so. Tax, in the words of Dalton, H. “is a compulsory contribution imposed by a public authority, irrespective of the exact amount of service rendered to the taxpayer in return, and not imposed as penalty for any legal offence.” whereas taxation could be described as all the processes involved in the contract drafting/negotiation for the design of the fiscal system, the legal framework, administration and imposition.
A good tax system should have some basic characteristic. These characteristics, as opined by Adams Smith in his book “The Wealth of Nations” are referred to as Canons of Taxation. Accordingly, Adam Smith stated four (4) basic canons of taxation to include: Equity Certainty Convenience Economy
These canons of taxation have today been expanded to include the design of the fiscal system and the legal framework