Some of the reasons why government tax businesses.

[TOZZIBLINKZ]

For long, government have totally made it a habit to impose taxes on various businesses. Apart from revenue generation there are other reasons why government impose taxes on businesses which also benefits the businesses in one way or the other. However there are several reasons why governments tax businesses:

REVENUE GENERATION: One of the primary reasons for taxing businesses is to generate revenue for the government. This revenue is used to fund public services such as education, healthcare, infrastructure, and social welfare programs.

FAIRNESS: Governments may also tax businesses to ensure that they contribute their fair share to society. Businesses often benefit from the infrastructure, services, and protections provided by the government, so it is seen as fair that they should also contribute to the cost of these services.

ECONOMIC STABILIZATION: Taxation can be used as a tool to stabilize the economy. For example, during a recession, governments may lower taxes to encourage businesses to invest and hire more employees, while during times of economic growth, they may raise taxes to slow down inflation.

ENCOURAGING DESIRED BEHAVIOR: Governments may also use taxes as a way to encourage or discourage certain behaviors. For example, they may offer tax incentives for businesses that invest in research and development or that hire employees from certain demographics.

REGULATING INDUSTRIES: Taxes can be used to regulate certain industries or businesses by putting certain taxes on products or services that are deemed harmful to society or the environment.

AVOIDING MARKET DISTORTION: Taxes can be used to level the playing field for small businesses, avoiding market distortion by large businesses with more financial resources.

These are some of the main reasons why governments tax businesses, but each government has their own set of policies and regulations, and their own reasons for taxation.

 

[CALVINDOL]

Government taxation on businesses is absolutely not a new thing and for long ago government have developed the habit of taxing businesses on a particular amount of money liability in which they usually have to pay possibly at the end of every month or at the end of every year. Business taxation is absolutely done by government for mutual interest and basically what that mean is that money gotten from businesses as tax are used to build capital projects in which businesses themselves and private individuals can also benefits such as good roads and other transportation system including electricity.

Another possible reason why government tax businesses is so as to stop the consumption of some business is considered harmful to human existence. Moreover in such a situation government impose high taxation on businesses that sells tobacco cigarettes and other harmful drugs, this is basically to discourage the consumption as well as the children of such products in Nigeria to be precise.