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Tax: The involuntary cost of sustainable development
Tax experts have argued that government cannot perform miracles as regards the sustainable development of any country.
The call for sustainable development is not just for the government alone as most people think; rather, the call is for all persons, groups and organisations that have a stake in the performance of the economy.
They stated clearly that tax Was the most sustainable source of financing development and developing countries should concentrate more on ensuring good tax administration.”
In any tax policy, socio-economic considerations such as equity, efficiency, administrative, simplicity and capacity must be put on the front burner.
In fact, some tax sources could prove so controversial that legal interpretation, judicial intervention and political horse-trading have to be sought before resolution.
In their view, tax revenue also depends on governments’ administrative capacity and infrastructure to collect taxes, and the firms’ and individual’s willingness to comply.
All over the world, compliance with tax laws is important to keep the system working for the greater good and to support the programmes and services that improve lives.
Tax is the cost recovery of living in an organised and orderly society. This is done to avoid inequalities in the system. The system of taxation varies across nations because the socio-economic needs and political arrangements amongst nations differ significantly.
Probably, the most prevalent political arrangements the world over is the federal system. In this type of political system, the federal government raises the largest revenues.
In Nigeria, the central government raises about 90 per cent of all revenues of the three tiers of government. This is also true of a few other countries such as Russia, Mexico, Malaysia, Argentina, Australia, Belgium, South Africa and Brazil.
Tax is a compulsory extraction of money by the public authority for public purposes thus, taxation is a process or system of raising or extracting money by means of agreed contributions from individual person or corporate body for the developmental purposes of government.
Paying taxes is not just about looking at the impact of tax systems on business prosperity but also the costs and benefits for the society as a whole.
The major and most important source of revenue to any government, whether federal, state or local, is tax, they stressed emphatically.
Taxes are essential for the development and growth of a country, state or local community and as such, the devolution of tax sources is also important because an unfair devolution can have serious implications for equity, unbalanced development and accountability.
There is a whole school of thought and professionals who study only taxation and money but their writings are often complicated for intelligent lay readers who just accept the complexity of the subject.
Yet it is essential that the role of taxation is well understood by the tax payers. Taxation is central to the life of government, federal, state, local or unitary; therefore it is not surprising that governments perennially debate money.
Who and what to tax, how to spend the tax, whether to run surpluses or deficits and what to do with the funding excess/gap are big questions that linger and answers are very difficult to find, they said.Share