Individuals' earnings; wages, salaries, allowances, bonuses,
etc., are required annually to compete and submit a form to the relevant revenue
agency for approval, and file that stamped approved form with their respected paymaster,
for accurate tax deductions to be made and submitted on their behalf to that
same agency. Taxes budgeted to be paid from individual earnings are cross reference
against birth and immigration records, group or company registry filings and
historical submissions, while actual individual taxes paid on earnings are
checked against paymaster records and current submissions. The leakage here is
well known to be from individuals who pay themselves.
Groups' earnings; Business Levy, Environmental Contribution,
Corporation Tax, etc., are legally mandated to file quarterly reports in most
cases, to numerous agencies along with its payments. These groups; share or for
profit and retain or nonprofit organizations, are subjected and must comply with
inspection audits, at any time, by any of its regulators and the country's main
tax collection agency to review compliance. The national budget uses complex
industry related calculations to project tax revenue amounts to be collected
from group earnings, while actual collections and tax receivables due are
functions of every audit. The leakage here comes from inadequate audit
staffing.
Trade and consumption tax; Sales and Value Added Tax, Import
Duty, Extractive Royalty, License Fees, Inheritance Tax, etc., are all revenue
generating measures available to Governments involving the exchange of Goods
and Services. Sales tax is ultimately charged to the consumer and paid in by
the retailer. Value Added Tax is charged and paid in, at every exchange point
in the product's distribution channel. Import Duty is a charge on Goods purchased
and transported into the country and is collected at the border. Royalty fees
are charged on the removal of irreplaceable values. License fees are charged to
operate within an industry. And inheritance tax is charged on assets transfer
due to a death certificate. The leakage here is cause by valuation errors.
Taxation Revenue charged on holdings; Property Tax, Investment
Income Tax, etc., are based on economic performance. Real estate or property
tax is calculated at a fixed percentage of the property’s assess value, noting
that, many market driven factors can affect such values. Investment income tax
is calculated at fixed rate(s) according to the investment bracket. Expectations
in the national budget are mainly historically based with predicted economic
trends, while actual realizations are simply checked against issued statements.
The leakage here is usually very small. Hence, adequately funding, staffing and
maintaining its historical and interconnected database which can be easily
queried and referenced will reduce tax evasion.
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.
