Disadvantages Of Taxation

In multi-national corporations (MNCs), taxation has caused heated debates and generated strong criticism from civil society in recent years. Taxation is of great importance to the development of every nation. It is a major source of revenue for the development of nations worldwide. In general, the taxation of companies and business activities is a difficult task for states.
Taxation is said to be the means by which the government finance their expenditure by imposing charges on individual citizens and corporate entities. Tax is a compulsory monetary contribution to the state’s revenue that is assessed and imposed by government on the activities, enjoyment, expenditure, income, occupation, property of individuals and corporate entities. It can also be the financial charge or other levy which is imposed onto a taxpayer by the state or the functional equivalent of the state in that failure to pay, or evasion of or resistance to collection, is punishable by law. Basically there are two types of taxes, which are the direct taxes and indirect taxes. Direct taxes are levied on the income, profits, or other gains and are deducted at source and paid directly to the tax authorities. These include corporate tax, property tax, capital gain tax, stamp duties, gift tax and rent tax, and also Indirect taxes are levied on spending. They are charge when a taxpayer buys items and are paid to vendor as part of the purchase price of the item. This include Purchase tax, export and import tax,