Business plays an important role in the development of society; by developing natural resources and human talents, markets and brands, by creating jobs and collecting and paying taxes into the local and national treasury. The treasury, in turn, funds the public budget for healthcare, education, security, infrastructure and other key social programs to benefit all inclusive of workers, managers and of course, the business.Developing natural resources and talents to add more value and attract a better price that with allow more development to take place is no simple matter, requiring a large investment in research and a lengthy time period before results can bring economic rewards. Billions are budgeted for exploration and extraction toward finding energy components and other useful raw materials, which contribute significantly to the treasury in the form of license fees, taxes and royalties. On the other hand, billions are expensed on education and culture developing individual skills, without any structured avenue of returns, leaving it to the individual conscience to develop the society.
Developing markets and strong brands also require large intangible investments in promotional activities and time before the market trust to make the product a household name, creating demand and adding value. Associations and individual business may spend millions on trade negotiations and presentations, advertising campaigns and distribution channels to penetrate markets and position the brand, resulting in more import duties and an increase in sale based taxation into the treasury. Not forgetting, the infrastructural works and community enhancement the organization must do as part of its marketing.
Creating Jobs, where every employee pays taxes, calculated following statutory guidelines, deducted from the individual’s pay slip and paid by the employer, in bulk, into the treasury, and inspected for its accuracy and compliance by the relevant authorities. Hence, any job loss will negatively affect Government’s payroll tax revenues.
Collecting sales taxes on luxury products is a straight forward activity, as calculations are presented directly on the sales invoice, then these amounts are separated from all total sales payments and paid, in bulk, into the treasury. Similarly, value added taxes paid by customers with offsetting payments to suppliers, which when balanced, the resulting amount is used to reconcile that particular account for payment into or out of the treasury. Noting, that inspection of sale and value added taxes are carried out for its accuracy and compliance by the relevant authorities. Hence, any decline in sales activities will negatively affect Government’s sale and value added tax revenues.
Paying corporation and other profit based taxes is essentially the greatest contribution business can make to the treasury, as it summarizes economic activities, if sales are down from previous years and jobs are under threat, profits and profit based taxes will also diminish. Therefore, Governments’ priorities must invest and encourage economic activities for industrial development and job creation to increase tax revenues. Business Ideas is the key element in enhancing the quality of life.
Rationale
T.A.J & Associates Company Limited uses this occasion to comment on topics that have been covered, both academically and by the mainstream media, to add its opinion and point out investment opportunity, not to invoke any social action.
