Uses of Tax Rates.
Taxes are the involuntary money that individuals have to pay to the government for the developments of the country.
Taxes are considered as the source of the governments monetary power, this s because they are the major source of income for the government, his is the reasons why the government puts a lot of regulations on the payment of tax so as to protect it.
In every activity that individuals engage in that is resulting to income is always taxed this might be in a companies, employment and business, also when we are buying products they always have an additional cost of tax from the original sale price such as while buying a car or a cloth in the shop.
It is important to note that not all entities pay taxes, this depends on the activities they are being involved in in most cases it is the NGOs that are doing the humanitarian work, some companies such as in the medical and food production sector, the reason why they are exempted from paying tax is due to the services that they provide to the citizens are based on helping them rather than making profits.
The government usually have taxation methods that are known to the citizens that are meant to ensure that there is a controlled specific amount of money that each person pays some of them are like the PAYE which refers to pay as you earn, in most cases individuals do not pay the same amount of money.
There are many ways the government utilizes the money collected from the tax some of this ways are as follows.
The government pays a particular amount of subsidies to the products that individuals need is basic but expensive an example is on foods and sanitary.
Development projects, this is where the government uses the money to do projects that are aimed at benefiting the citizens of the country, some of the common development projects the government does are such as; construction of public schools, road construction and maintenance, and others.
Sometimes the government spends money on educational systems to ensure that it is affordable to them this money spent is from the tax pool.
The state has to pay the workers and thus the use of tax in payment of the police, military, and other administrators.
The government can also use the money collected to help the needy people, this might be people in the country or outside, this tax can also be used for charity an example is a calamity that have affected a neighboring country and it helps in the recovery of the affected people.
Not paying tax is a crime and when one commits it he/she may be forced to pay a particular amount of money or go to prison.
For the sake of credibility the government ensures that they make it clear on the money that was collected and also, are accountable for the expenditure of the taxes.