- Personal Finance
Why should we pay income tax – A Perfect Solution to end tax worries
Why we pay Taxes
Paying taxes has become a day-to-day activity for all of us, but whenever we pay tax we do not feel comfortable. Every time a question comes in our mind, why should we pay taxes and why it is required or what government actually does with taxes? There are so many taxes that an individual needs to pay. Right from eating bread to travel on road or to watch a movie, and so on, you have to pay different taxes. Obviously, to run a country and to provide infrastructure, government need funds and they take it in the form of taxes. But, does that mean half of our salary will be given to government just to provide the basic needs.
According to me, taxes should be justified and appropriate as per the actual requirements/budget of the government. Also it should give us a clear and transparent flow where our money from taxes is going. If people will know how their money is used, it would give them a sense of satisfaction as they know they are contributing to the economy of their country.
In India, people pay a huge 30.9% income tax (30% + 3% of 30% as CESS). If government is using part of the tax to lay down roads and flyovers, it should be mentioned where that road will be constructed. And another thing is that, if you have already paid the tax then why the government imposes toll tax after constructing these flyovers? Also, why Road tax is there?
Whenever you go out to have food, you will be charged both VAT and Service Tax, which sky rockets the bill by at least 20-30%. I do not understand the reason behind paying the taxes again and again. Government first takes tax from your salary, and then takes sale/income tax from the vendor who sold the food, then Service Tax and VAT again from you. It is like you are paying tax two to three times just to survive in your own country.
Different taxes to pay
Income Tax (Max %)
Service Tax (Max %)
VAT (Max %)
Education CESS (Max %)
Additional 3% of tax amount
Income Tax OR Other Taxes
Apart from providing basic infrastructure, these funds are also used in building up of orphanages, to provide education to under-privileged children and for several other reasons. If part of tax (3%) is going for education as CESS, then why again we need to pay CESS on mobile phone bills each and every month. All this is nothing but kind of extortion for middle class salaried people. Either there should be just income tax and no other taxes OR government must stop charging income tax and continue to take service tax, VAT, excise, goods, sales tax to build roads, flyovers, take CESS for educating child.
I know most people won’t agree with my opinions and argue that other countries also tax even much higher than India, but one must also check the infrastructure and facilities that country provides to its citizens.
If you are paying tax for building basic infrastructure multiple times, have you ever thought where the money is actually going? A big part of the taxes simply goes missing then why should we pay different taxes for same reasons multiple times. Every now and then we hear big scams, do you know whose money it was and from where it came? It is just our money which was excess than required as we paid tax multiple times. If government really wants to do something, then provide better job opportunities to poor, so that they can earn money and educate their children. To provide job opportunities, government need not depend on taxes from individuals at all; it is simply an investment to run any business.
Solution to end Double Taxation
I do understand government needs some money; actually lot of money to run the system, to provide safety and for lot of other tasks, but taxing salaried individuals again and again must be stopped. Either government should stop charging Income Tax OR stop charging un-necessary taxes repeatedly. One better solution that came to my mind is that, government should provide a privilege card, especially to income tax-payers, so that they need not pay any other irrelevant tax by simply showing this card. It will also encourage individuals to pay income tax to get the real benefits of being a taxpayer.
If people will have more money in their pocket, they will spend more and money will keep on flowing in the market and that is what I think is more required for the betterment of the economy of any country.
What do you think of current tax structure? Is the Government charging
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