Taxation is the action and the effect of taxing. The verb indicates control and criticism of actions or projects of someone, or the fulfilment of the role of the tax or the listener (the person who investigates and who reported suspicious activities or the individual who represents and serves as the prosecution in the courts).
The taxation is to consider an activity to check if it is in accordance with the regulations in force. In the private sector, taxation (or audit) may be ordered by the State (in order to check if a company respects the law) or internally by the companies themselves (to check balances, the stock and the destination of the goods, etc.).
For example: If there is a complaint against a company that to what it seems, does not invoices for sales, a State Agency decides to monitor the company in question in order to verify if it pays its taxes. If the analysis of its activity finds that actually, the company failed to pass bills, the State can act with some sort of penalty. However, if the audit reveals that the company complies with the Act, the complaint remains without effect.
In the public sector, taxation involves controlling the activities of the State in order to confirm whether they are subject to the principles of legality and effectiveness. Contracts established by the Government and the use of the heritage of the State are among the factors that are often subject to a taxation.
The function audit (or taxation) must not be left in the care of the Government because the control must be precisely performed on its activities.