Canons of taxation Throughout the world, free enterprise economy is being encouraged to grow and develop. Some strongly believe that Adam Smith is reborn. Consequently, there is a dire need to refresh ones mind in respect of Adam Smith's canons of taxation so that, while developing new income tax law or undertaking major revision in it, the spirit of the above canons is genuinely reflected. Pertinent excerpts from Adam Smith's four celebrated canons of taxation are quoted below: Canon of Equality "The subjects of every state ought to contribute towards the support of the government as nearly as possible in proportion to their respective abilities that is in proportion to the revenue which they respectively enjoy under the protection of the state." Canon of Certainty "The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor and to every other person. Where it is otherwise, every person subject to tax is put, more or less, in the power of the tax-gatherer, who can either aggravate the tax upon any obnoxious contributor, or extort, by the terror of each aggravation, some present or perquisite to himself." Canon of Convenience "Every tax ought to be levied at the time or in the manner in which it is most likely to be convenient for the contributor to pay it." Canon of Economy "Every tax ought to be so contrived as both to take out and to keep out of the pocket of the people as little as possible, over and above what it brings into the public treasury of the state." However, later economists have added few more canons to Adam Smith's four canons briefly quoted above. Amongst these are the following: Canon of Elasticity This means that the tax system should not be rigid. Canon of Simplicity KISS model be followed i.e. Keep It Simple Sir