Originally it was the Egyptians who invented the system of Taxes. They appointed Tax Masters, whose job it was to increase the burden on the slaves under the Egyptian domination. Tax collectors, also known as Scribes, were drawn on tomb paintings dating as far back as 2000 B.C.
They taxed simple things such as the use of cooking oil in family meals, as well as other aspects of daily life. They accomplished this by auditing households and checking that the correct amount of cooking oil was being consumed. They also ensured that residents were not using methods of cooking other than the taxed oil.
Greece adopted the tax system from the Egyptians and used it in Athens during times of war. They created a tax, known as eisphora, which was used to pay for special wartime expenditures. They stopped the tax system once the emergency war was over. Once additional resources were gained by the war effort they refunded the tax. Greece is one of the few societies that managed to maintain this system. Foreigners where taxed in Athens under the metoikion tax.
Ancient Rome took on the tax system and included sales taxes, and inheritance tax, as well as tax on imports and exports. Caesar Augustus is considered as one of the best tax strategists of the Roman Empire. During his reign as “First Citizen”, he made cities responsible for collecting taxes, instead of allocating the task to tax collectors from central government. He created an inheritance tax of 5%, which resulted in all military costs being paid for. This inspired the English and Dutch to make similar taxes in later years.
During Julius Caesar’s reign, sales tax was enforced. Caesar Augustus changed Julius Caesar’s sales tax of 1% to 4% for slaves and 1% for everything else. The first tax-free shipping port at Delos was created in the 4th century B.C. The shipping port is known as the first “Tax Haven” in history. It diverted traffic from Rhodes. Roman Emperor, Vespasian, expanded taxes during the 1st century A.D. He created the Fiscus Judaicus, known as the Tax on Jews, as well as a tax to use urine for cleaning or tanning leather. An inheritance tax of 10% was enforced on all Roman Citizens in 212 A.D.
The Queen of Englia, Boadicea led a revolt, which can be credited to corrupt tax collectors in 60 A.D. The revolt allegedly killed over 80,000 people, including all the Roman soldiers within 100 miles. She managed to seize London during the process and raised an army of 230,000. Emperor Nero finally managed to stop the revolt and appointed new administrators for the British region.
Lady Godiva caused a bit of disturbance herself in the 11th Century. According to legend she rode through town naked on horseback, as part of a deal that she had made with her husband, Leofric, the Earl of Mercia. He had promised to reduce the taxes if she went through with the dare. The residents of Coventry, where the tax was reduced, honoured her for her courage.
From then on countries battled and fought over different types of taxes. Eventually each country began editing its own tax system to suit its needs. They expanded the tax system, dropping smaller taxes for bigger ones, until eventually we have the system we have today.