What aspect of tax collection is referred to as collection efficiency?

Collection efficiency in tax collection refers to the cost-effectiveness of the process by which taxes are collected. This concept evaluates how efficiently a tax system can generate revenue relative to the costs associated with collecting that revenue. A system with high collection efficiency means that a relatively small amount of resources—such as time, money, and personnel—are used to collect the taxes owed, thereby maximizing the net revenue collected for the government.

In this context, cost-effectiveness is critical because it focuses on ensuring that the expenses incurred by the tax authority do not outweigh the revenue collected. A tax system that is cost-effective can dedicate more resources toward public services or reduce the burden on taxpayers while still ensuring compliance and revenue generation.

Other concepts like the fairness of tax rates, the amount of tax revenue generated, or the complexity of tax law compliance address different aspects of taxation but do not directly relate to the efficiency of the collection process itself. Fairness relates to equity in the tax structure, revenue generation focuses on the total income collected regardless of efficiency, and complexity deals with the ease or difficulty faced by taxpayers in understanding and complying with tax regulations. These aspects are important but distinct from the notion of collection efficiency which specifically emphasizes how well the tax authority can accomplish revenue collection relative to the