What Defines Our Life

The word tax has a negative connotation on the minds of many people. This is because it is money that is deducted from their wages or salary and goes towards meeting other expenses at the national level. Much as we may hate the idea of paying this money, it is a major avenue through which the government gets revenue to be able to continue with its operations.

Taxes fall under different categories and they are meant to serve a number of functions. For example, levy paid on imported goods is meant to regulate the amount of goods that come into the country. This encourages local consumption and boosts local industries. Sales levies are charged on consumer goods and they are considered a fair way of raising revenue from every citizen at an equal and fair rate. They are easy to calculate. People hardly realize that they are paying for them because the tax is hidden in the price of the good.

The percentage of the deduction to be made from the price of goods differs from one country to another, depending on the economic forces in play in that country. Sales levies aside, there are other types of levies that are in play in many states. Value Added Tax is among them. It may not have much difference from the sales one because it too is charged on goods. However, the value increases as the good moves from one stage of production to the next until it is in its completed, consumable form.

Apart from the levies imposed on goods, there are also those that are charged on labor. They include those that are work related. They are charged on salaries and they include sickness benefits, pensions and other contributions that are work related. These levies are directly charged on labor. Other taxes that are charged on labor are indirect and they include social security contributions and general payroll levies.

Apart from the labor levies, there are also those that are directly concerned with capital and they include interests, dividends and rent. Many people do not look as these as levies, but under critical scrutiny, you will realize that they are meant to raise revenue even if not directly for the state or government. Levies on property are charged on real estate while corporate levies are charged on businesses.

The issue of levy paying is as old as mankind and therefore people should learn to embrace the idea whole heartedly. Note that, much of the money the government collects goes into providing basic social services and amenities, therefore making life more bearable for the less fortunate. Furthermore, citizens benefit from these services in one way or another, directly or otherwise. Some of the levies one pays during their vocational life span goes a long way in ensuring that they enjoy retirement benefits as they are given pension or are incorporated into certain schemes that look after them in their old age. The services are made possible to access due to those levies.

Peter Gitundu Researches and Reports on Finance. For More Information On Taxes, Read More Of His Articles Here MANAGE TAXES

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