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The compulsory amount of contribution made to the state revenue, imposed by the government on people’s income and business profits is known as the tax. Taxes are an integral part of the economy of every nation. Taxation Online Quiz Help tells us that there is a credit creation in the market and it must be controlled or else it might lead to inflation or economic relapse. This situation can be brought under control by balancing the taxes. In case of inflation, taxes are increased in order to increase the purchasing value of money. Initially, taxes were introduced only for the purpose of government revenue generation but slowly the importance of taxes was realized and today they are used for various purposes across the globe. It is given in Taxation Online Quiz Help that taxes are also utilized to work on several development programs for the nation, therefore it is compulsory for the people whose income exceeds a certain amount specified by the government to contribute towards this initiative in the form of taxes. Taxes are implied in such a way that import trade is discouraged and the national industries are protected. The taxpayer may not receive direct benefits in return of taxation but somehow this money is invested for their betterment. Taxes can be classified into many types on the basis of their nature; a few of them are direct tax, regressive tax, progressive tax, indirect tax etc.
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Importance of Taxes
Taxes are very important for any developing or developed nation. Its importance is summarized in a few points mentioned below in Taxation Online Quiz Help. They are
• Strengthens the national economy – Taxes are important for the protection of national industries and promotion of export trade which leads to the development of a stronger economy for the nation.
• Collection of fund for development programs – Several government revenue funds are collected in the form of income tax, customs duty, value-added tax, goods and service tax, land revenue tax etc. It is already mentioned in Taxation Online Quiz Help that these taxes are used for many development programs
• Reduction of regional economic disparity – Government encourages the entrepreneurs and businessmen to set up their workstations in the backward regions and they do so by allowing them tax exemptions, concessions, higher tax returns, tax rebates and many more tax facilities.
• Elimination of economic inequality – Taxes are necessary for the maintenance of the economic stability and this can be done by reducing the economic inequalities. Taxation Online Quiz Help informs us that taxes ensure equitable distribution of wealth among the income earners. It is most helpful to the common people.
• Giving direction to the economic sector – Taxes motivate the economic sectors to move in the right direction by encouraging them to make efficient use of the resources. The government imposes a high tax rate on the harmful materials and products whereas the production and distribution of useful goods involve lesser taxes.
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