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There are following eight essentials or characteristics (features) of a good tax system:

First, a good tax system should lead to fair and equal distribution of wealth in the community.

Second, it should be composed in such a way that it yields sufficient revenue to the government.

Third, the cost on collection of taxes should not be excessive.

Fourth, the burden of taxes should be distributed in proportion to the ability of the tax-payer, i.e., it should be progressive in character.

Fifth, taxes should be levied at such a time or in the manner which is most likely to be convenient for the tax-payer to pay it.

Sixth, tax system should be fairly elastic.

Seventh, there should be certainty with regard to the time and the amount to be paid to the government.

Eighth, the system of taxation should be fairly simple. It should also be easy to administer.