Purpose and importance of taxation

Taxes are the materials of government revenue, this is used for government centers. Ratios help in analyzing the performance trends over a long period of time. Tax treaties are effectively an incentive offered only to investors from a particular country. This includes financing government and public projects as well as making the business environment i. The higher the standard of living, the stronger and higher the level of consumption most likely is. Taxation is important for an economy for raising fund for meeting the public expenditure. Governments use the revenue from this tax to build and maintain highways, bridges, and mass transit systems. The 18thcentury economist and philosopher adam smith attempted to systematize the rules that should govern a rational system of taxation. A tax is a compulsory financial charge or some other type of levy imposed upon a taxpayer an individual or legal entity by a governmental organization in order to fund government spending and various public expenditures. Without taxes, governments would be unable to meet the demands of their societies. Taxes support national defense programs, roadway construction, social service programs, public health and education.

Taxation is used by the government to raise revenues for its operations, infrastructure, welfare, education defense carnell, 2010. Taxation refers to compulsory or coercive money collection by a levying authority, usually a government. The government and other policy makers have the responsibility of ensuring that the system takes into account the needs of the citizens. Since taxation is a state institution, its purpose of the public interest need not be included in the definition of taxation. The irs indicates that taxes are vital to support the infrastructure that citizens rely on at the local, state and federal levels. The objective of excise taxation is to place the burden of paying the tax on the consumer. What do you think is the purpose and importance of taxation. While the federal income tax rules are now more complicated than ever, the benefits of good tax planning are arguably more valuable than ever before. Tax evasion double taxation means 1 taxing twice 2 by the same taxing authority 3 with the same jurisdiction 4for the same purpose 5 in the same year. The main purpose of our government in imposing taxes is to raise fund enable for them to work, because taxation is the strongest power of the government and therefore, it is highly needed by them. The revenue is required to pay for the goods and services which the government provides. The macanese tax system is, of course, of the utmost importance for that purpose. A countrys tax system is one of the determinants of other macroeconomic indices such.

Each of the functions fulfilled by the taxation instrument is a manifestation of an internal feature, an indicator or trait or this economic category. Basic tax principles, personal taxation, tax planning for individuals and taxation for small business and company are the topics of interest for respondents. Although they need to be reinterpreted from time to time, these principles retain remarkable relevance. Bahari and ling 2007 conducted a research that aimed to seek the importance of tax education. Explaining the primary purpose of taxation taxation is a means by which governments finance their expenditure by imposing charges on citizens and corporate entities. Tax season is upon us, and understanding how taxes work and can affect you is a significant part of being a tax payer. Apart from avoiding double taxation, why do countries sign them. Taxation is a form of initiation of force, which is immoral, destructive, and unacceptable whether perpetrated by an individual, mafia, or government.

Explaining the primary purpose of taxation economics essay. Taxation systems are usually modeled in such a way that they take into consideration the social welfare of the citizens. Some very important instruments that a tax system may use are the tax treaties for the avoidance of double taxation dtts double tax treaties. Encyclopaedia britannica indicates that the primary purpose of taxation is to allow a government to allocate resources as necessary. All governments in the world cannot run its administrative office without funds and it has no such system incorporated in itself.

Title the purposes and substance of taxation kambe. Raising government revenue in terms of income tax, custom duty, excise duty, entertainment tax, vat, land revenue tax etc. The main purpose of taxation is to accumulate funds for the functioning of the government machineries. Blum under our federal income tax many of the substantive rules for classifying actions have long appeared to call for an inquiry into somebodys state of mind.

Functions or purposes of taxation, managerial economics. Revenue, redistribution, repricing, and representation. Interestingly, they have done so with no economic penalty. Taxation is a means by which governments finance their expenditure by imposing charges on citizens and corporate entities. There are various instruments for taxing agriculture, including taxes on land area, on land value, on net income and on land transfer. The concept of taxation is also important to businesses because governments can fund this money back into the economy in the form of loans or other funding forms. The main purpose of taxation is to provide the government with the funds needed to deliver public 1100 words 5 pages. Please check your internet connection or reload this page. To redistribute wealth from the rich to the poor see. Findings from this study show that hightax countries have been more successful in achieving their social objectives than lowtax countries.

The other main function of tax treaties, especially from the perspective of developing countries, is about tax competition. But your tax money isnt just going toward fancy shindigs at the white house although, to be. What are the importance of tax tax is a major source of government revenue and its contributes for the overall development and prosperity of a country. The bottom line is that taxation should foster equal distribution of resources. Findings from this study show that high tax countries have been more successful in achieving their social objectives than low tax countries. Financial ratio and its analysis purpose importance. They have found that 64% of the non business respondents wish to learn about tax. The government came up with the body of kenya revenue authority to collect taxes from its people. Taxes play crucial roles in helping in the development of various governments sponsored projects for better performance.

Taxes consist of direct or indirect taxes and may be paid in money or as its labour. The three goals of taxation had made its way into the legal literature. Follow report by army89582 31 minutes ago log in to add a comment. Truly speaking, in the modern world, taxation is used as an instrument of economic policy. Taxes help raise the standard of living in a country. For the worldwide operation of firms, taxation plays a vital role. The predominant importance of agriculture in developing countries makes agricultural taxation a potentially significant source of tax revenue and a means of transferring resources into productive investment. The term taxation applies to all types of involuntary levies, from income to capital. Preparation of income tax return of an individual 1. Also referred to as social engineering, the purpose of this is to discourage people from antisocial behavior and is often done heavily taxing the commodity.

Indeed, raising taxes on tobacco and thereby increasing its price is one of the most effective ways to reduce tobacco use. For a country like india,we are usually adopting deficit budget,we have to find additional fund every year. In its strict sense, it is also referred to as obnoxious or direct duplicate taxation or direct double taxation. The impact of taxation as an aid to economic development includes abstract and chapter one, complete project material available the impact of taxation as an aid to economic development in edo statea case study of oredo local government area, edo state, nigeriaproposalthe research work will discuss in detail the impact of taxation as an aid to. Hey, governments impose charges on their citizens and businesses as a means of raising revenue, which is then used to meet their budgetary demands. Prices affect virtually all measures of cigarette use, including percapita consumption, smoking rates and the number of cigarettes smoked daily. Definition of taxation it is the process by which the sovereign, through its lawmaking body, raises revenues used to defray expenses of government it is a way of the government in increasing its revenue under the authority of the law, purposely used to promote welfare and protection of its citizenry it is. Without taxes, government contributions to the health sector would be impossible. The primary purpose of taxation is to raise revenue to meet huge public expenditure. However, it is not desirable to exclude purposes from the definition of taxation, especially when such a purpose is characteristic of taxation. Taxation has become the core of various financing decisions which includes international investment decisions, international working capital decisions, fund raising decisions and the decisions related to dividend and other payments. A recent mistake at harvard has left many of its employees owing the irs thousands of dollars in taxes.

In the wealth of nations book v, chapter 2 he set down four general canons. Taxation, imposition of compulsory levies on individuals or entities by governments. A failure to pay, along with evasion of or resistance to taxation, is punishable by law. Specifically, taxation negates the concept of property rights by claiming that the government has first right to the income or money of its citizens. Vat, esc, tt and nbt function and purpose of taxation in a modern economy economic factors government taxation represent a withdrawal from sri lankan economy. The functions of taxation illustrate its social purpose of the valuebased distribution and redistribution of income. The main purpose of taxation is to provide the government with the funds needed to deliver public services, reduce poverty in society, and to invest in country development and security systems, imf, oecd, world bank, 2011. Most governmental activities must be financed by taxation.

Taxes are levied in almost every country of the world, primarily to raise revenue for government expenditures, although they serve other purposes as well. They also help a business to compare the financial results to those of competitors. According to various economists, there are four major purposes of taxation that are redistribution, revenue, representation and repricing. Typically governments use tax money to support expenses related to building and technology infrastructure, military programs, public safety, environmental protection and. They also point out the problem and weak areas along with the strength areas. In other words, taxation policy has some nonrevenue objectives. Importance of accounting since i just told you what the purpose of accounting was, lets talk about why its important. Taxes are crucial because governments collect this money and use it to finance social projects. Do you remember being a child, and it seemed that as soon as you were given. Several reasons make it important for taxation to be conducted in the country. Learn by example and become a better writer with kibins suite of essay help services. A good example of this use of excise taxes is the gasoline excise tax.

Motive, intent, and purpose in federal income taxation walter j. Function and purpose of taxation in a modern economy. Only people who purchase gasoline who use the highways pay the tax. Browse essays about importance of taxes and find inspiration. Motive, intent, and purpose in federal income taxation.