Month End Glossary

Tax Base

Tax Base refers to the total value of all assets, income, or financial items on which tax can be calculated by a governing authority.

Tax Base represents the aggregate amount of resources or value upon which tax rates are applied to calculate a tax liability. For example, in income taxation, the tax base is the total amount of reported taxable income, while for property tax, it is the assessed value of the property. Determination of the appropriate tax base is essential for a tax authority to collect revenue efficiently. The broader the tax base, the lower the tax rate can be to achieve the same amount of revenue.

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