Tax farming

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Tax farming, occurring historically in Egypt, Rome, Great Britain, France, the Greater Middle East and Greece, was the principle of giving the responsibility of tax collection to citizens or groups, rather than the government. In Arabic it is called Iqta, referring to a type of tax farming practiced by the Seljuks, Mamluks and others. Tax farms (portions of land) would be granted to those who had distinguished themselves in the military or bureaucracy. The principle was considered very effective for tax revenue collection. In many parts of the world, including Europe, the Middle East and the Far East, tax farming was responsible for state consolidation and an increase in central autocracy.

However, it suffered because the tax-farmers often abused the taxpayers for tax collection, despite being the most efficient means of gathering funds for the state based on land censuses. The Tax Farming system bears some resemblance to the Feudal European and Japanese system, as well as sharecropping in the American South after the Civil War.

Tax farming also refers to the method of tax collection practiced in France during the days of the Old Regime (prior to Louis XVI). In essence individuals or companies paid the government for the right to collect taxes. Clearly such a system is open to abuse and corruption and the system of tax farming is usually seen as one of the causes of the French Revolution of 1789.

Tax farming

See also