Tax

A tax is a compulsory payment that individuals and businesses must make to the government under applicable laws. Unlike a fee or charge, a tax does not provide the payer with a specific service in direct exchange. Instead, the money collected is pooled and used to fund public functions—such as transportation networks, education systems, healthcare facilities, national security, and other community services.

Example: When a person pays income tax, they are not purchasing a particular service from the government. Rather, the amount contributed helps support essential public goods like road maintenance, policing, and schooling, which benefit society at large.