Kautilya’s economics describes a number of taxation rules. These rules are related to the amount of tax, recovery methods, and methods of taxation.
A brief description of the rules is as follows-
- Appropriate and Justified Taxation : The king should not realize taxes at his whim and fancy. In adverse times, the king should request politely for heavy taxation and impose it only once. Infertile land should never be taxed heavily.
- Timely Tax Collection : According to Kautilya, agricultural tax should be collected only when the crop has ripened. The king should not impose taxes at inopportune times to collect wealth.
- Taxation in accordance with capability : According to Kautilya everyone should be taxed according to their capability. This makes the tax collection easy and people do not oppose it.
- Financial Discipline : Kautilya laid a lot of emphasis on financial discipline. According to him, all taxes obtained from the people should be deposited in the treasury. Honest and qualified staff should be appointed for this work. Income from taxation should not be misused. There should be a proper arrangement that the employes involved in this work are not involved in corruption.