Introduction To Taxation

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CHAPTER ONE DESCRIPTION OF TAXATION 2.1 Introduction to Taxation Tax is a reissuance instrument, that is, all tax collection will be government revenue, then used to provide public goods (including public services). Direct taxes are imposed on individuals through income taxes, and on companies in the form of corporate income tax. Indirect taxes are imposed on producers or consumers in the current market. Indirect taxes aim to increase government revenue, eg service tax, sales tax and others. Indirect taxes also aim to discourage the use of an item, eg alcohol and cigarettes. The immediate impact of taxes is the increase in production costs. 2.2 Types and Features of Tax 2.2.1 Direct Tax Direct tax is a type of tax whose tax burden can not…show more content…
As a consumer we are not always exposed that this product is subject to sales tax as it is not disclosed to consumers. But the sales tax element has been taken into account as a cost, and traders have included in the sale price of the product. 2.3.4 Goods and Services Tax (GST) Therefore, tax reform measures are implemented to ensure a more transparent and efficient tax system. The government has abolished sales tax and service tax available previously and replaced it with tax on goods and services or in English is Good and Service Tax (GST). The main purpose of introducing the GST is to broaden the country's source of income, which has so far dependent on petroleum products. Goods and services taxes have been introduced in more than 160 countries around the world and have proven to be effective in the context of modern economics. Countries such as Singapore, United Kingdom, Australia and Thailand have long introduced goods and services tax. 2.3 Purpose and Advantages of Taxes Tax is a very important economic instrument for a country to earn revenue. The proceeds from this tax are used by a government to govern and manage the country as well as for the development of the country 2.3.1 The Development Of The…show more content…
In fact, if we look at this tax issue more profoundly, we will see that people who benefit from the tax imposed are ourselves. In short, taxes are the key to effective national administration and we cannot escape it. One of the government's responsibilities, which requires income from taxes is building schools as a place to educate children. In addition, the government also allocates funds to provide basic infrastructure such as building roads connecting villages, towns and cities with surrounding areas, and allowing trade activities to occur between these areas. The government is also responsible for building public facilities such as markets to provide space for people to trade and carry out their economic activities (Abu Bakar, 2013). 2.3.3 Taxes Imposed On Items Such As Liquor, Cigarette And Gambling The tax burden on these items is to ensure that unhealthy activities like drinking alcohol, smoking and gambling will be controlled and not harmful to the community. Additionally, taxes imposed on these items can also be used for recovery, environmental and various campaigns to promote a healthy

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