Taxation imposes a heavy burden on taxpayers. That burden consists of three elements. In the first place there are the taxes themselves. Secondly, there are the efficiency costs involving tax-induced market distortions. And finally there are the operating costs of the tax system: the costs to the government of administering and collecting the taxes, and the costs expended by taxpayers in complying with their tax obligations. The first two of these costs are well recognized in the economic literature, and have been the subject of extensive debate and research over the years. But, until relatively recent times, there has been far less written about the operating costs of taxation systems. This study focuses on the conceptual, theoretical and historical issues of operating costs of taxation.