The role of tax on Economy growth
Many a time some individuals and corporates have tried in vain to avoid remitting tax to the responsible government agents. What seems to not have dawned on them is the knowledge of how positive the role of tax is in terms of developing the nation if the funds are channeled effectively and correctly. As we all know taxation is the main source of government revenue and the collection of the tax will be used by government for development purposes. Tax system is the combination of the tax policy and tax administration which is central to the successful implication of the fiscal policy and the overall management of the public sector.
The role of tax as a source of finance in government spending cannot be overemphasized. Taxes are collected through the income tax of the companies, individuals (income tax) and also through goods and services (VAT). Through the collection of taxes, the tax revenue would be used for development purposes.
These include infrastructure, development of public goods such as road construction, public toilets, stadiums, schools, hospitals and clinics. The design of the tax system is one way to increase the resources in a way that is done in the administrative and political as well as promote equity and efficiency as far as possible.
Supporting the health sector
The AU Abuja Declaration of 2001 stipulated that at least 15% of the national budget must be allocated to health. On another avenue to support the health sector the sub-Saharan Africa’s average 11, 3% of the national budget. Aids Levy was also introduced to fight the HIV and AIDS pandemic
Drought Relief Systems
Natural disasters such as Tokwe Mukosi are among the beneficiaries of government funding as humanitarian aid. Among other pertinent economic activities that the national budget can support is the agriculture sector. Programmes such as command agriculture are funded from the government coffers to see their successful implementation
Education and social welfare
When government has enough funds it is able to fund education and also ensure education of those who are underprivileged. Basic Education Assistant Module is one of the government assistant programmes
There are so many programmes and economic boosting activities that the government can conduct using tax payer money. Against this background it is imperative for every taxpayer to reflect on the immense contribution that they are doing to the nation at large.