Tax Farming

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Tax Farming


a system for collecting taxes and other state revenues from the population. Under this system, the state transfers the right of collection to private individuals called tax farmers in exchange for a certain fee. Tax farmers accumulated great wealth since the taxes and charges they collected exceeded by two or three times the amount deposited in the treasury.

Tax farming is characteristic of precapitalist systems in which a natural economy is predominant, credit is not developed, the state is in financial difficulties, and communications are poor. Three forms of tax farming existed: (1) general, which encompassed a country or the entire tax system; (2) regional, which encompassed a single city or region; and (3) special, which dealt with individual taxes, such as customs duties or revenues from the liquor monopoly.

Tax farming first became widespread in Iran in the sixth century B.C. and in Greece and Rome in the fourth century B.C. In the Middle Ages, it was widespread in France from the 13th century and was also practiced widely in Holland, Spain, and England. It was one of the most important sources for the primitive accumulation of capital. As capitalism developed, tax farming was preserved in a distinctive form in 20th-century Italy, where private and savings banks collected certain taxes. In the late 19th and early 20th centuries, forms of tax farming were used for collecting tax arrears in the USA. Tax farming was widely used in the Ottoman Empire beginning in the late 16th or early 17th century; it was abolished in 1925. It was also widely practiced in Iran from approximately the tenth century to the 1930’s and in India from the 13th or 14th century to the 19th century.

In Russia, tax farming (otkup) was introduced in the late 15th or early 16th century. It was used especially for customs duties and salt and liquor revenues. Tax farming to collect liquor revenues was introduced in the 16th century and assumed the greatest importance during the 18th and 19th centuries. Treasury revenues from the liquor tax constituted more than 40 percent of the income from all taxes in the state budget. In 1863 tax farming to collect liquor revenues was abolished and replaced by an excise tax.

References in periodicals archive ?
The Aayog quickly distanced itself from the Debroy's comment, saying it was Debroy's personal view and there was no proposal in the 3-year action agenda to tax farm income.
One tool that local governments use to try to maintain local agriculture against the pressure of lucrative urban development, explain Anderson and England, is to tax farm land at a much lower rate than urban land.
The book singled out this total revenue giving in detail the in come from each tax farm contract under the main entry of the tax farm revenues ('ani'l-mukata'at).
Why do New Zealand lawmakers want to tax farm animals?
Links between their families were strengthened further by the introduction of the malikane, or the lifetime tax farm, and these families--the Jalilis, the Umaris, the Yasin alMuftis, and the Qara Mustafas--dominated the social and political life of Mosul into the nineteenth century.
Taxation is important, but tax farm ing is a neutral instrument in that it does not make a difference who the farmer is, but rather what rules are on the books and how he applies them.
140-59) comprises a corpus of receipts from the tax farm of a certain Abu l-Hasan ibn Wahb in the Fayyum for the period extending from 402/1012 to 405/1015.
Tenders are invited for Printing of registers file cover Receipt books Property Tax Farms other forms etc.
As fiscal concerns were dominant, the distribution of tax farms had nothing to do with sectarian identity; what counted was maximization of revenues and enhanced government control.
verified all information using tax farms and financial statements from certified public accountants and by conducting interviews with company officials.
For example, in the 1840s Christian peasants in Bulgaria revolted against a perceived violation of the ruler's justice when local Christian tax farmers secured decisions from judges at local Muslim courts that would have established absolute ownership rights over lands that were part of their tax farms.
Mostly citadel guards managed their assignments by subcontracting them as tax farms (iltizam) to Aleppine residents, including Janissaries and ulema, as a means of increasing their diminishing incomes.