Primary source of revenue for the government is tax.The government imposes mandatory financial charge to citizen which is called tax.The tax generated is used for development purposes and to pay government workers.Controversy surrounding taxation has made it quite impossible for the government to targeted amounts as per the budget.The issue is greatly affected by citizens who avoid paying taxes.Before digging deeper to the issues affecting the sector lets first highlight the various types of taxes and measures put in place by the government to ensures the compulsory financial obligation is met by everyone.
Payroll tax is deducted from employees wages and salaries and it is normally conducted by the employer on the behalf of the state.The payroll tax is determined the salary which one is entitled to.The method of taxation is provided by the state or government.Employers obtain taxation ratios from the government.Payroll tax is among the major sources of income for the government hence it is observed very seriously.V.A.T is another common tax among businesses.Tax is obtained from the goods and services provided.Every stage of production to consumption is taxed.Depending on the economy of certain states the tax maybe exempted for certain products and services.
Goods ferried across borders are obliged to custom duties.It is done on percentages upon the total value of goods being imported.This percentages are provided by government institution mandated to monitor rates.The rate is actually determined by the total value of the goods from the country which they have been purchased.The aim of custom duties is to protect the economy of the country by minimizing the amount of goods imported.This gives an opportunity to local manufacturers to market their products.The taxes limit the amount of goods ferried to the country.
Those are the most common types of taxes.The many taxes imposed on goods and services at times makes it challenging for business men to meet the obligation.Some are tempted to evade taxation by using fraud methods especially in smuggling goods across borders.Polices have been established to govern taxation to reduce fraud.The laws provide the methods for taxation and how it should be conducted on its jurisdiction.Policies include penalties for failing to pay taxes.Filling of returns is one way of ensuring people pay taxes.
The government works under financial years.Budget is made at the end of financial year.Everyone is entitled to file returns.Determining the amount of revenue that will be collected.Filling the returns is done via government portals to allow proper articulation of data.
Consequences for failing to file returns maybe harsh depending on the taxation laws.The penalties include serving jail terms.You may escape the penalties but not the effects of economy.The country is subjected to poor economic growth.Tax is what make the economy of a country strong.The country will experience economic backlash with poor revenue.They influence incentives given to investors limiting growth.Ensure to file your returns at the end every financial year.