Taxation means by which governments finance their disbursement by imposing charges on citizens and business entities. Governments use taxation to encourage or discourage certain financial decisions. Such as, reduction in taxable personal income through the amount paid as interest on home finance loans results in superior construction activity, and generates more jobs.
The effortless fact that taxation is an obligatory levy, it is not meant to be paid by all. It is merely a tax that’s meant for a group of people. These classes of people are known as 'taxable persons’.
Personal income taxes, for instance, are levied on people who earn income up to certain amount and company taxes are compulsory on those corporate entities that compose profit from trade or business.