IBN KHALDUN’S THEORY OF TAXATION AND ITS RELEVANCE

Abstract

Ibn Khaldun, the North African versatile genius scholar of fourteenth century produced his famous work ‘ al-Muqaddimah ’ (the Introduction) which is considered as one of the most sublime and intellectual achievements of the Middle Ages. It is a treasury of many sciences like history, psychology, sociology, geography, economics, political sciences, etc. He strongly argued in this book for low tax rate so that incentive to work is not killed and taxes are paid happily. His theory of taxation is an important contribution to economic thought. He is forerunner of the idea that high tax rates shrink the tax base because they reduce the economic activity. He is considered as the forerunner of Laffer’s curve. His ideas are comparable with those of supply-side economics that emphasised incentives and tax cuts as a means of economic growth.