taxeletaxa

Taxeletaxa is a proposed fiscal mechanism described in policy discussions as a levy imposed on tax collections rather than on economic activity directly. In essence, it’s a tax on taxes: a secondary tax assessed on the revenue authorities' own tax receipts. The concept is theoretical and has appeared in debates about diversifying government revenue without altering individual tax rates.

Mechanism: The levy would be expressed as a percentage of taxes collected in a period, paid to the treasury or to a dedicated public fund. It could be applied across major taxes (income, corporate, value-added) or targeted to specific sectors. Proponents say it creates a predictable revenue stream, supports enforcement and simplification of tax administration, and can fund public goods without changing tax incidence on households and firms.

Criticism: Critics argue that a tax on taxes amounts to economic distortion, risks compounding administrative complexity, and may be passed through in higher prices or reduced compliance. It could create a double tax burden on taxpayers and complicate budgeting and forecasting due to revenue volatility.

Status: No widely adopted implementation exists; it remains a theoretical instrument used in economic modeling and policy discussions. Its feasibility depends on legal, constitutional constraints, accounting practices, and political considerations.