Taxation and its relation to the profit of a business

[Mellorando]

A study shows that higher tax rates are associated with fewer formal businesses and lower private investment.
A percentage point increase in the effective corporate income tax rate reduces the likelihood of establishing a subsidiary in an economy by 2.9%.
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. ... Businesses flourish when there is a market for their product and services. Taxation, imposition of compulsory levies on individuals or entities by governments. Taxes are levied in almost every country of the world, primarily to raise revenue for government expenditures, although they serve other purposes as well. In modern economies taxes are the most important source of governmental revenue.

Here are seven ways Americans pay taxes:
1 Income taxes. Income taxes can be
charged at the federal, state and local
levels. ...
2 Sales taxes. Sales taxes are taxes on
goods and services purchased. ...
3 Excise taxes. ...
4 Payroll taxes. ...
5 Property taxes. ...
6 Estate taxes. ...
7 Gift taxes.

 

[Kingsley]

As we all know tax is a compulsory Levi imposed by the government of any country on her citizen annually, bi- annually, monthly, and also on goods and services withina geographical entity. This is done to enable the government to generate income and to also help the government to discharge her responsibility and duties of creating security for all and improvimg the welfare of her citizens. But in carrying out the major function as a government they must not impose it in a why that it will become unbearable for her citizens, which may make live very hard for her citizens.

Because if the tax rate is too high it will affect the cost of goods and services which will have a direct impact in the lives of her citizens either negatively or positively. So it is better for the tax rate to be kept low so as to enable the citizens pay without stress and burden on the part of the tax payers. And the proceeds that are been derived must be used judiciously for the betterment of all.

 

[Caramelle]

Taxation is important because it is the lifeblood of the government and the economy itself. The government cannot perform its functions and exercise its powers without financial backing. Directly or indirectly, we all pay taxes. There is VAT in almost every product that we consume. VAT is also imposed on utilities. VAT or sales taxes may be added to the cost of food and drinks when we eat at restaurants or buy takeout foods. Thus, whether or not we are required to file tax returns, we are part of the tax ecosystem.

Excessive taxes may stifle the growth of businesses because they increase the prices of goods or services, often resulting in lower sales and reduced patronage. They usually add to the administrative burdens of companies who need to remit and/or report the taxes and provide supporting documents or information. This and other economic factors may force small businesses to close and lay off their employees. Thus, imposing taxes do not directly benefit most people and businesses.

Instead of imposing more taxes, governments should find ways to make tax collection more efficient. They should look into streamlining their organization and operation to trim down the expenses. Corruption and political patronage are needlessly escalating the cost of running a government and they should be addressed firmly and fairly.​

 

[btaliat]

Tax is the backbone of every government but it is the fishhook to business men. Tax has always been an hinderance to the proper maximazation of profit by the business owner. There are times where a business owner even used some of his profit for tax. I think some fsctored must be considered first before tax should be paid by the business men and to avoid tax evasion. Retrogressive tax system should be employed where a business pays in proportion to how much it generates. Government should provide an enabling environment for the business operations. Another factor is that there should be reduction in the loan interest to make its payment convinient for the business owners.