Dear Readers, I am putting efforts to share some information as well as my opinion on a red-hot topic, ‘Impact of Taxes on any Country’s Economy’ but before moving ahead let me just highlight some useful information with regard to Taxes. Generally, the understanding of the people with regard to the word ‘TAX’ is that it is the collection of Revenue or Money by the Government through direct or indirect systematic ways and it is also generally understood that the collected revenue is used for the development purposes.
Now coming to some more details and information, basically the taxes are the mandatory contribution by the citizens of a country which adds value to the states Economy. Well! Having said that I am categorizing the Taxes in Two categories, a) The Direct Tax b) The In-direct Tax while in both categories there are various types of Taxes paid and collected. For example, in the first category, (Direct Tax) any citizen of a country or any organization active in any country pays a percentage amount of money on the property, wealth and assets, salary or business income or any source that he or the organization owns which is paid directly to the state and importantly it cannot be transferred (the Tax percentage depends on the value) while the second category (In-direct Tax) include; sales, excise, custom and service tax etc, this Tax is commonly known by GST (Goods & Services Tax).
Let me now touch-base some more important aspects related to the topic. Since the above lines delivered some brief information on Taxes and its types while the most significant factor that needs to be conveyed are the facts that is equally needed to be understood. All countries have the Taxation system to collect revenue for the state to run its developmental programs and projects. The citizens are bound to pay their taxes (directly and in-directly) as they need and require facilities of life to be provided and to be made available by the government.
It is also well known that all countries have their own system, mechanism and liabilities of Tax collection, Tax percentages and Tax values. As I have earlier shared in one of my posts that the Economy is the Backbone of any Country and I would further build on the same by saying that “The Taxes are the Backbone of the Economy”, but if it is utilized and spent fairly and appropriately in the best interest of the country and the citizens of the country although it is collected very fairly by developed and the developing countries both but utilization and spending differs (I guess).
The Taxes play an important role in the Economic Growth of a country as it has strong implications in terms of inspiring investment and savings and exploring possibilities of increasing the states revenue, it also plays a significant role in reducing the wealth inequality and above all the most import factor is that it strengthens the governing machinery as well as controls the prices. Therefore, it is ideal that any country/ regime which desires Economic Growth and Development needs to put all its strong efforts and potentials not only towards Tax collection but also towards fair, proper and systematic utilization of the collected Revenues.
Now moving towards conclusion, I would wish to put two (2) thought provoking questions to my Respected Readers that ‘Are the developed countries, called “DEVELOPED” (Economically strong) as they are Fair enough in Tax Collection and its Utilization? and ‘Are the developing countries remain as “DEVELOPING” countries (Economically Weak) due to corruption in Tax Collection and Utilization? I appreciate valuable comments and thoughts of my Readers on the post.