Tax Collection Methods

Collection of Tax is one of the most important functions of tax administration. The methods of tax collection vary from country to country. The general methods, however, can be manipulated as:

• installment method
• Withholding method
• Collection along with self-assessment

1. Installment method: An ndividual or an entity having assessable income during an income year from a business or investment is required to pay tax in three installments

2. Withholding method: Withholding tax is deducted from employment income, investment return, services fees, contract or other incomes

3. Collection along with self-assessment: Each person is required to file a return within 3 months after the end of a income year. While filing thereturn, tax payer are required to pay outstanding tax if any