The trinidad Guardian / As the saying goes, in life there are two certainties: death and taxes. Taxes are involuntary fees levied on individuals or corporations by a government (whether local or at the national level) entity in order to finance its activities.

In economics, taxes fall on who ever pays the burden of the tax whether it is the entity being taxed, like a business, or the end consumers of a businesses's goods.

The payment of taxes is mandated by law and in countries and jurisdictions around the world, a special agency is usually tasked with the collection of tax revenue.

Broadly speaking, there are some general categories of taxes that are common in most territories around the world.

These would include: Income Tax, Corporation Tax, Property Tax, Sales Tax and Tariffs. Income tax, as the name states is a levy on an individuals declared income.

Corporation tax is a tax on the profits made by a company through their business activity, Property tax is levied on owned property assets, sales taxes are paid by consumers who purchase taxable items and tariffs are taxes paid on particular categories of imported or exported goods.

Tax rates can either be flat, progressive, or regressive. A Flat tax occurs when all individuals and companies pay the same rate of tax.

A Progressive tax system occurs when individuals and corporations that earn income in excess of certain predetermined thresholds, pay higher rates as their income rises.

A regressive tax on the other hand is one where the tax rate decreases as the amount subject to taxation increases.

Ultimately, the purpose of taxation is to allow governments to fund activities that are in the best interest of their jurisdiction and develop the overall economic and social wellbeing of their country.

The provision of public goods such as roads and other infrastructure, schools, healthcare, national defense, law enforcement, and a court system increases the economic welfare of society if the benefit outweighs the costs involved.

In T&T, taxes are collected by the Board of Inland Revenue (BIR) on behalf of the government.

The largest contributor of tax revenue to the state has long been the energy sector which, according to data from the Central Bank fell from roughly $25.6 billion in 2014 to $4.6 billion in 2016 (strictly central government energy sector tax revenue).

The sharp decline in energy sector tax revenue is commensurate with the collapse of energy commodity related prices in that period.


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