Exploring Taxes: What purpose do they serve, and why does the government require them? Is tax payment indispensable for citizens? and understanding the various types and their relevance to citizens.
Every government bears fundamental responsibilities such as ensuring the security, welfare, and efficient functioning of the nation. To fulfil these duties, governments require financial resources, which are primarily obtained through the collection of taxes from citizens.
Tax is money that people and businesses have to pay to the government. It is like a mandatory fee that government collects from individuals and organizations to fund public services and projects. It is a way everyone can contribute to the functioning of society.
There are two main types of taxes:
1.     Direct Tax – This is directly charged on person’s income. For Example, income tax is a type of direct tax. Individuals need to pay tax. It is paid directly from your income.
2.     Indirect tax – Indirect Taxes, like the Goods and Services tax are paid by consumers indirectly through the purchase of goods and services. This money is paid by you indirectly when you buy things like when you shop.
For people who work and earn a salary, income tax matters a lot. It is like a percentage from your income that goes directly to the government. Paying taxes is a legal obligation, and failure to do so may result in legal action, including notices and penalties, for attempting to evade income tax. So it is really necessary to understand how much tax you owe to the government.
DISCLAIMER: The information provided in this blog is intended for general informational purposes only. While efforts have been made to ensure the accuracy and reliability of the information presented, it may not be comprehensive, and it is subject to change without notice. Readers are advised to consult with experts in the relevant field and verify the information for accuracy and currency. The views expressed are those of the author and may not represent the views of others.