Income tax covers almost everything that a person earns. This includes wages and salaries, interest on bonds, savings bank accounts, dividends on stocks and rents. It also includes the monthly payments for doctors, lawyers, authors, inventors among other professionals. The question that many people ask is how did income tax start?
During the era of emperor Wang Mang of China, a new form of tax was instituted and it was different from the true form of income tax in terms of land and slaves, which traces its history to china. During the 18th century, William Pitt enforced the first ever income tax system in the world. William devised the system in order to cater for the expenses that were to be used on weapons, during the wars against Napoleon Bonaparte in imperial rule over France.
The tax system was implemented in a unique way such that on an income amount of over 60 pounds, the tax rate was 0.8333. On the other hand, on an income amount of over 200 pounds, the tax rate was relatively higher and it was increased up to the rate of 2.5%. The total amount of income tax was implemented in a way that it would raise up to ten million pounds although it only managed to raise 6 million pounds.
In Britain, the rates of tax are usually fixed by an annual finance act and the professionals who manage the income tax system are referred to as commissioners of Inland revenue. When income tax was introduced, it was only undertaken as a temporary measure but today, income tax is considered as a personal tax on all the amount of income that an individual earns, from an investment or employment annually. The amount is usually assessed based on an annual return income, based on the rate of tax, which is graded according the amount of income and with the difference between the amount of earned and unearned income.
During the era of emperor Wang Mang of China, a new form of tax was instituted and it was different from the true form of income tax in terms of land and slaves, which traces its history to china. During the 18th century, William Pitt enforced the first ever income tax system in the world. William devised the system in order to cater for the expenses that were to be used on weapons, during the wars against Napoleon Bonaparte in imperial rule over France.
The tax system was implemented in a unique way such that on an income amount of over 60 pounds, the tax rate was 0.8333. On the other hand, on an income amount of over 200 pounds, the tax rate was relatively higher and it was increased up to the rate of 2.5%. The total amount of income tax was implemented in a way that it would raise up to ten million pounds although it only managed to raise 6 million pounds.
In Britain, the rates of tax are usually fixed by an annual finance act and the professionals who manage the income tax system are referred to as commissioners of Inland revenue. When income tax was introduced, it was only undertaken as a temporary measure but today, income tax is considered as a personal tax on all the amount of income that an individual earns, from an investment or employment annually. The amount is usually assessed based on an annual return income, based on the rate of tax, which is graded according the amount of income and with the difference between the amount of earned and unearned income.
