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In economics we refer to these two acts as tax evasion and tax avoidance. The former being illegal while the latter legal.
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Taxation refers to the 'compulsory transfer of funds from individuals and businesses to the government1'. These transfers can be levied on many things. Some examples are on, oil, tobacco, alcohol, petroleum or inheritance. One of the functions of the government is to find a good taxation system in order to earn revenue, which is used to fund public expenditure. Taxes throughout the ages, in their various forms were been regarded as an evil. This brought people to find ways and means in order to avoid the burden of taxes or at least pay the least possible. In economics we refer to these two acts as tax evasion and tax avoidance. The former being illegal while the latter legal. This is defined as the failure to pay taxes legally2. An example of tax evasion is the smuggling of drugs or tobacco. Tax avoidance is defined as arranging one's affair so that...
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