The impact of the tax on economic development

The impact of the tax on economic development
 
Effects of a positive tax on economic development The imposition of taxes in a fair manner that takes into account different levels of income increases the economic growth in the long run. The following are some of these effects: [1] Encouraging individuals to do more work, savings and investment. Reducing the budget deficit in the country. Reducing dependence on foreign aid, which is an unstable source of revenue for the country. [2]. Helping international governments fulfill their traditional functions of providing some goods and services. Organizing trade activities in a manner that preserves the economy. [2] Giving the government greater flexibility to control development work; by designing a schedule that helps improve the economic environment within it, and setting appropriate conditions to attract foreign investment. [2] The effects of a negative tax on economic development may lead to a rise Tax on certain levels leads to negative effects on the general economy, and here are some of these negatives: [3] Corporate and shareholder taxes reduce investment incentives and build capital. Which in turn affects the volume of investment, and consequently a decrease in the number of productive workers and a decrease in wages. Higher taxation for higher income earners reduces educational returns because higher incomes are linked to higher levels of education, which leads to a lower incentive to create human capital. The higher the level of taxation, at the level of personal income, reduces the incentive to work. The concept of tax: Tax is defined as compulsory financial fees imposed on individuals, business owners, or final consumers of the goods of a particular company, and companies, by a local or regional government agency, and these fees are spent to finance public projects in the country such as works projects , Public services, infrastructure construction and maintenance. Evading the payment of financial taxes is also considered a crime punishable by law, because the tax has a role in being a source of revenue for the state and a source for improving the economic situation in it, and the following is a census of the most common types of taxes: [4] Income tax: a percentage that is deducted from profits at the individual level And submit to the government. Corporate Tax: A tax that is imposed at the corporate level in a percentage that depends on the company’s annual profit value. Property tax: It is a tax imposed according to the value of land and property. Goods Tax: A tax imposed on specific goods and services. Customs Tariff: A tax imposed on imported goods used to promote projects and private companies within the country.