The term tax is derived from the Latin word Taxosignifying a levy or financial charge imposed upon an individual or entity by the state government to fund public expenditure.Students of economics and commerce are well acquainted with the process of taxation and its various types homework answers. Their 360-degree knowledge about taxation helps them come out with flying colors in examination.
Tax evasion is a punishable offense in all countries as per their respective law, however, the duration and type vary according to their legal constitution. Tax collected can either be direct taxes or indirect taxes. Itâ€™s collected in the form of money or monitory equivalent. In some countries, a homogenous percentage of tax is imposed while in other tax calculation is complex and based on annual income.
In some nation, a pittance is levied in the form of tax owing to the exceptionally poverty stricken population. Thus we can correctly point out that taxation process varies widely among developed, developing and underdeveloped countries.
Purpose of taxation and its various types homework answersÂ Â Â
An aspiring economist or an accountant must be conversant with the process of collection of taxes, its types, and allocation to have an in-depth understanding of the subject.
Tax collection sometimes is less than the expenditures budgeted by the government. This is when the government incurs debt and borrows money from various quartersâ€™ namely foreign countries, international monetary fund (IMF) and utilizes a portion of tax collected in next year to settle the debt. If government debt keeps on increasing over a period of time with no improvement in collecting taxes, the government declares bankruptcy as the Greece government did in early 2016.
Taxation and its various types homework answers show cycle of borrowing money to fund public expenditure and social welfare schemes with no or less investment causes a country go into a debt trap. South East Asian currency crises is a copybook example of how few South East Asian countries could not improve their tax collection owing to less investment and went into a debt trap in the late nineties. Curtailing IMF loan could have been a good option which wasn’t practiced due to fear of public backlash. They were the only source of public funding and social welfare schemes run in the country.
Social welfare schemes funded by tax money are
Taxation and its various types homework answer provides answers to the type of taxes and how they are classified to form a robust fiscal policy for a country. After all, none of us would like our nation to get into a debt trap or become bankrupt. To avoid various financial complications arising out of taxation process, we need to go deep into the analytical study of taxation process.
Tax levied on income of individual or a corporation is termed as Income tax which is further subdivided based on types of income.
Capital gains tax
Social security contribution
Payroll taxÂ Â Â Â Â
Value added tax
Apart from the said taxes, various other taxes are levied based on the fiscal policy of respective government. Taxation and its various types homework answers the classification along with their calculation making it easy and hassle free for students who are pressed for time to complete their lengthy assignments.