Why Do We Pay Taxes?
Every government needs reliable sources of funds for public investments and social programs to foster development and economic growth. Such programs like education, health, proper infrastructure and are fundamental to ensure the attainment of a functional, prosperous, and practical society. To attain all that, the government has to raise funds. Taxes not only pay for public services and goods, but also a key ingredient in the social engagement between the economy and the citizens.
And as such, it is important for citizens to hold the government accountable to ensure effective expenditure and administration of revenues collected from taxes. Additionally, governments must ensure that they design a system that ensures tax compliance that will not discourage or burden taxpayers from participating. On the other hand, citizens should also play their role in remitting the required taxes as stipulated in the law and demand proper accountability of the same.
Why Do Tax Rates Matter?
The amount of cost of tax is key for businesses for growth and investment. Where taxes are high, most businesses are more likely to leave the formal sector and opt for more casual and informal activities to earn a living and for sustainability. Profit taxes make part of the total tax cost businesses incur. Therefore, keeping and ensuring taxes are of a reasonable level encourage the development of the private sector and making more businesses formal and less casual. Additionally, having modest tax rates play a major role in enhancing and encouraging small and medium-sized businesses to keep in business since they play a major role in employment and economic growth, as much as they do not significantly contribute to revenue collected from taxes.
Entities care about what is done using the taxes they contribute. Quality and reliable infrastructure is key for sound functionality of any economy as it plays a major role in helping persons determine where and how they will set up their businesses. Also, a healthy and conducive workforce is key for the productivity and competitiveness of any economy, investing in proper healthcare system is key for both moral and economic growth. Also, basic education enhances the efficiency of every employee, and good and quality institutions of higher learning and training enables the economies to enhance their value chain way beyond production products and production processes.
Why Do Post Filing Processes Matter?
Filing of tax return with the Kenya Revenue Authority does that mean that it is the end of the road for determining the final tax you are liable to pay as a taxpayer. Usually, the stress of taxation begins after filing of returns. Post filing processes such as undergoing a tax appeal or tax audit, or claiming of value added tax (VAT) refund, are among the most challenging and stressing interactions that an entity has with the KRA, Kenya Revenue Authority, or any tax authority within the jurisdiction in question.
Therefore, it is critical for businesses to invest more time and expertise into the processes that take place after filling tac returns more than the normal tax compliance procedures. It is for this reason that dennykinsandassociates ensure that we are available to help businesses and individuals have the easiest time while interacting with the tax authorities.
Why Does Tax Administration Matter?
Effective administration of taxes plays a major role in encouraging businesses to go formal, and thus, enhancing collection of more revenue due to an expanding tax base. An unfair tax administration system is likely to cause dispute in the tax system and significantly reduce the legitimacy of the government. Moreover, it is critical to ensure constant improvement in tax administration each time there is an introduction of a new tax system to ensure there is even imposition of taxes, limited tax evasion, and more tax revenue collection.
When taxpayers ensure compliance with the tax laws, the systems will keep working smoothly for all and so are the products and services required to improve lives. One major technique that the taxman can employ to ensure compliance is to make sure that the tax laws are simple and clear as possible. This is given to the fact tat complicated tax laws encourage tax evasion to higher multitudes.
Tax Delinquency
Each tax has a due date and reporting requirements. Some taxes are collected immediately a transaction is initiated or leading up to a transaction like tariffs and sales taxes. Other taxes are on recurring fixe schedules with a repeating due date in a month. When one fails to remit the required amount pf tax to the tax authorities, different penalties are incurred. To reduce poverty, resume economic growth, and have enough support to counter climate change, it is essential for countries to enhance tax collection and ensure that they have suitable tax systems in place in a more efficient and equitable manner.
It is important for the government to balance goals like sustainable growth, mobilization of revenue, and reduction of the cost of compliance with setting up a tax system that is equitable and fair. Fairness entails relative taxation of the rich and the poor, individual and corporate tax payers, rural areas and cities, informal and formal sectors, investment and labor income, and the younger and the older generations. Additionally, a more effective and efficient tax system can also play a major role in enabling the private sector to contribute immensely in creating jobs and revenue collected.
It is critical for taxpayers to understand the various implications of tax evasion, the essence of compliance, and keeping the government accountable. A good tax system and civic education helps in boosting compliance and thus, more tax revenue collected for government projects.
It is for this reason that we ensure that we, dennykinsandassociates provide you with adequate and relevant tax information and tax administration services to make it easier to navigate your business tax obligations and individual tax obligations. Taxpayers are a key asset to developing entities as they play a major role in generating revenue for the country to boost economic growth and sustainability.
