What is taxation? Taxation is a requirement in all countries. It is a method to provide the society with the necessities needed. Hence it combines all efforts from the full society for public goods. Franklim D. Roosevelt once said “Taxes, after all, are dues that we pay for the privileges of membership in an organized society”. Which makes people wonder of the importance of taxation in a sociey, roles of taxation, fairness of taxation, and a new method of tax green tax. Importance of Taxation in a society.
Taxation was introduced in the 19th century and exists to this very day. It is an economic verity that governments need revenue in order to finance their activities and their spending programs for the society and the country itself. A nation requires combined effort from all members of the society for the publics good; for example', building roads, ports and other necessities; the only practical method is through some form of taxation. In addition it is important for individuals to know that the government is not able to operate and function properly or provide the essentials to the public without the collection of taxes from the public. Since taxes is the most effective way of raising the revenue.
Now, moving towards the benefits and needs of taxation in every economy as to why taxation is really important in societies. Governments carry out many functions and run their spending programs in order to provide the society with the necessary requirements provided by the taxation money collected from the society itself; Firstly taking a look at economic infrastructure, things that are jointly soughed after, such as roads, hospitals, enforcement of contracts, police and armed forces for protection. Secondly, they use it for the functioning of the government itself, social engineering and public works. Thirdly, governments spend on war expenses, property protection, public order and implementation of law in the country. The government also funds public and welfare services which include education system services, pensions for the elderly, health care system services, benefits for the unemployed and transportation services for the public. Other public benefits such as water, waste management systems and energy.
According to the view of political philosophies that taxes are vindicated since they fund government activities that are beneficial and required to the society. Taxation in modern nations have the advantage of social development and the majority of population. A similar presentation quoting from Oliver Wendell Holmes, Jr is "Taxes are the price of civilization". So basically, taxation is vital and plays a prominent role in developing countries for the advanced well-being of their residents and public expenditure.
Roles of Taxation:
In an economic perspective taxation is used by the government for three things efficiency, equity and stabilization. In Efficiency, taxation is used in order to reduce in completion alteration and ease matters in an incomplete market. The value of goods is provided by the taxes in equity and lastly, stabilization, taxation manages the risk that individuals face and stabilizes the macroeconomic. Taxation is used in many different ways. There are seven roles mentioned by Waidyasekera (2007) and they are: 1. In most countries around the world taxes are enforced and collected by the government. Taxes are collected from governments to be used as public expenditure. For instance: roads and road lights are fixtures that is built and paid by the government from the payment of taxes. The main purpose is to create a strategy to develop the taxation policy and the reason after it is for the government to collect revenue and put it in public use.
2. All countries have wealth and income; these incomes come from collecting taxes and using different types of taxes to redistribute between wealth and income. A definition of income is stated by Singhania...