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What Are The Benefits Of Tax Break To The Citizens/Residents And To The Government
Nuru And Tax
Nuru was a good cow herdsman. He had been in the business as long as he could remember. In fact, he inherited the business from his father who also inherited from his grandfather - it was a family business. Nuru would not want to continue like his father or his grandfather by limiting himself just within the province. Although the business was a big one, what Nuru wanted were expansion and exploration. He wanted to establish the same business in other countries and he was very keen to do so. Carelessly for Nuru, he never studied the system/structure of the country of his destination.
Government, People And Tax
One of the most important factors which determine the success, life span etc., of a business is the system of taxation in the country - province/state of where the business will be done. Government depend heavily on tax in order to keep them running. In some country 100% of Government revenue is from tax/royalties- no Government joke with that. This is why tax is placed upon every resident (with exemptions) and every business (with exemption) in a country. One of the exemptions is what this series centred on.
The benefit of n individual as a citizen/resident or business owner(s) and to the Government will be discussed in this series.
According to ' Economic for You and Your Nation' written by Nicolas, tax break is any item that posses tax avoidance. Tax avoidance is most time deliberate rather than mistaken by the Government in order to spur activities of certain business. Tax break could be in form of tax exemption, tax credit, tax concession or tax deduction. Tax break create incentives for foreign investors and local investors.
Nuru who wanted to abide with the rules wanted to only do business and pay is tax accordingly. He did not study the condition of the place of his destination. Yes, he was a law abiding resident. He paid what he should pay. Unfortunately, he could not make any reasonable profit after tax at the end of his financial year.
In the next article, you will see how Laura as a resident benefited from tax break and the benefit of tax break to both the Government and the citizens.