What type of tax system is characterized by minimizing compliance and administration costs?

The correct answer is the efficient tax system. An efficient tax system is designed to minimize compliance and administrative costs associated with tax collection and enforcement. It seeks to create a balance where the effort and resources spent on tax compliance are as low as possible while still achieving revenue goals. Efficiency is important because high compliance costs can deter taxpayers from fulfilling their tax obligations and can strain administrative resources.

In the context of tax systems, minimizing costs can also encourage higher levels of voluntary compliance. This is crucial for the overall functioning of the tax system and for ensuring that it operates fairly and effectively. Efficient tax systems often have straightforward rules and structures that are easy for taxpayers to understand and comply with, thus reducing potential errors or oversights.

Other types of tax systems, such as progressive and regressive tax systems, focus primarily on how tax burdens are distributed among taxpayers rather than on minimizing costs. A flat tax system may offer simplicity and transparency, but it doesn't inherently prioritize minimizing administrative expenses in the same way as an efficient tax system does.