ABSTRACT
This chapter discusses the principles, types and effects of taxation. Taxes constitute a main source of public sector revenue in many countries nowadays. Principles of taxation have been formulated, in the contemporary age, within accounting professional circles. The American Institute of Certified Public Accountants (AICPA) outlined ten guiding principles of taxation namely, equity and fairness, certainty, convenience of payment, economy of collection, simplicity, neutrality, economic growth and efficiency, transparency and visibility, minimum tax gap, and appropriate government revenue. Nowadays the governments of most countries in the world raise revenue through a combination of forms of direct and indirect taxation. At the individual level, the scholarly literature on taxation has long highlighted the effects of tax incidence on the behaviour of producers, consumers and savers. The analysis of the tax incidence of the excise shows that both the producer and the consumers are left in a worse condition than before the excise was introduced.
