Tax and Special Assessment

Both tax and special assessment are collected for the promotion of common interest. Both are compulsory payments. In spite of these similarities. tax and special assessment differ on following points.

1. In case of tax, the tax payer does not get any direct benefit. But in case of special assessment, special benefits are conferred on the individual.
2. Tax may be progressive, proportional or regressive. But special assessment is always proportional to the benefit received by the person concerned.
3. The sphere of tax is vast. It is imposed on the people of the whole country. But the sphere of special assessment is very much limited. It is a local tax and is confined to the local improvement.
4. Tax is collected either to meet the day to day administration of the state or to meet the cost of economic development. But special assessment is collected only to meet the developmental expenditure. Hence it is known as betterment levy.
5. Taxes are collected every year whereas special assessment is once-for-all payment.