Importance of taxation

Hey, Governments impose charges on their citizens and businesses as a means of raising revenue, which is then used to meet their budgetary demands. This includes financing government and public projects as well as making the business environment i. Taxes are levied in almost every country of the worl primarily to raise revenue for government expenditures, although they serve other purposes as well. Learn more about taxation in this article. 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.

Taxes help raise the standard of living in a country.

The higher the standard of living, the stronger and higher the level of consumption most likely is. To encourage the production and distribution of the products of basic needs and discourage the production and harmful ones. To discourage import trade and protect the national industries.

What are the Importance of Tax. Why Are Taxes Important? The type of taxation system used can vary from country to country. Local governmental units deliver services to its residents from its collection of local property, income and sales taxes. Much of the revenue derived from these taxes are used for police and fire protection, building schools, maintaining local roads, and protecting citizens against local health emergencies and neighborhood crime.

Although taxation has a long history, it played a relatively minor role in the ancient world.

Taxes on consumption were levied in Greece and Rome. Tariffs —taxes on imported goods—were often of considerably more importance than internal excises so far as the production of revenue went. As a means of raising additional funds in time of war.

Explain the importance of taxation. For the worldwide operation of firms, taxation plays a vital role. The objective of excise taxation is to place the burden of paying the tax on the consumer. A good example of this use of excise taxes is the gasoline excise tax.

Governments use the revenue from this tax to build and maintain highways, bridges, and mass transit systems. This is to remind Nigerians of the need to pay their taxes. It has to do with a requisite levy which the government expects individuals and corporate bodies to pay. For some reason, a lot of people seem to think that extortion is fine if the extorter (the tax man) works for the government.

Browse essays about Importance Of Taxes and find inspiration. Learn by example and become a better writer with Kibin’s suite of essay help services. While some level of taxation is necessary to fund government operations, excessive taxation can have negative consequences. Taxation is a key fiscal policy instrument in any economy. 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.

There are various instruments for taxing agriculture, including taxes on land area, on land value, on net income and on land transfer. The importance of the equi marginal utility is that it is used as a basis for the progressive taxation. The other importance is that it is used in the redistribution of income.