Government Revenue and Taxes
The collection of taxes and fees is the way to development priority. It is important to finance investments in human capital, infrastructure and the provision of services for citizens and businesses. It is also important to set the right price incentives for sustainable private-sector investment.
TAX NEED TO BE FAIR
Collection of taxes and fees is a fundamental way for countries to generate public revenues. This revenue makes it possible to finance investments in human capital, infrastructure, and the provision of services for citizens and businesses.
There are preliminary analyses that estimate the financing gap for achieving the Sustainable Development Goals (SDG)for developing countries at about $2.5 trillion annually.
Most of this financing gap will need to be met by increased private-sector investment in sustainability, which requires appropriate tax policies in creating the needed price incentives.
Yet, developing countries that are in need of revenues, including fragile and conflict-affected states (FCS), frequently face the steepest challenges in collecting taxes.
Taxes have an important role to play in making growth sustainable and equitable, especially in the period of the COVID-19 crisis, and through such efforts as “greening” tax systems and fighting tax evasion and avoidance.
Many countries are still finding means to collect sufficient revenues to finance their own development. Countries that are collecting less than 15% of GDP in taxes must increase their revenue collection so as to meet basic needs of citizens and businesses.
This level of taxation is a pertinent tipping point in making a state viable and put it on a path to growth.
Making the payment of taxes as easy task improves competitiveness. Overly intricate tax systems are associated with high levels of tax evasion, large informal sectors, more corruption, and also less investment.
Modern tax systems ought be seeked to optimize tax collections and also minimizing the burden on taxpayers to comply with tax laws.
There is a need to ensure that the tax system is always fair, not-manipulated and equitable. This surely requires a brilliant and sustainable strategies but the goal is yet to be met.
Governments have to balance each abs every of their goals. Examples of these goals are increased revenue mobilization, sustainable growth,
and reduced compliance costs with ensuring that the tax system is fair and equitable and uninterruptible. Consideration of fairness includes the relative taxation of the poor and the rich, corporate and individual taxpayers; cities and rural areas; formal and informal sectors, labor and investment income; and the older and the younger generations.