The legality of Levying Income Tax on Illegal Amounts Received by a Taxpayer ---- Personal Reflection
Income tax is essentially a tax levied on a person’s income from various sources. It is a direct tax in the sense that it is demanded from the very persons who, it is intended or desired, should pay it. Hence, every person either a natural person or a corporate entity should have to pay income tax on the respective income they derived. Nevertheless, Income-driven by a taxpayer may not always be holy. Some incomes earned illegally can be mixed with the lawfully acquired income of the taxpayer. For instance, a shop selling contraband products with lawful once, a hotel collecting payment from prostitutes… etc. At the end of the day, if not understated, such incomes will be reported to tax authorities.