Each and every citizen has to make some obligatory contributions to the state revenue. This type of contributions is known as a tax. Systems to levy the taxes vary from nation to nation. But, in general, taxes are levied from income of workers, business profits, transactions, production and sales of goods and services etc. A Government uses these amounts levied as taxes to develop the country’s economy and infrastructure.
A GOOD TAX? HOW IS IT POSSIBLE?
A tax system must have four basic characteristics to make it suitable for maximum citizens and organizations of a nation.
An Equity should be maintained so that everybody can pay a fair share of taxes. Two types of equities are there in this regard. They are Horizontal Equity and Vertical Equity.
In Horizontal Equity, taxpayers of the same income groups have to pay the same amount of taxes.
In the case of Vertical Equity, various proportions are maintained which do not consider financial conditions of the taxpayers. This equity is subdivided into Regressive Tax, Proportional Tax and Progressive Tax.
If anyone has to pay a larger share of income as tax amount than those of higher income, then it is known as Regressive Tax.
If taxpayers of all income groups have to pay taxes based on a certain proportion, then that type of tax is known as Proportional Tax.
When the individuals of higher income groups pay higher shares of their earnings as taxes, then that type of tax is known as Progressive Tax.
A taxation system must have Adequacy. It means the entire amount levied as taxes must be enough to a government to fulfil the basic needs of the society.
There must be simplicity in a taxation system so that the taxpayers can easily pay their taxes. It also helps to increase the amount of revenue. However, many taxpayers search to find such a Canadian Tax Consulting service who can guide them to understand the hierarchy of the entire Tax System of Canada.
In a taxation system, a government should always maintain transparency in technical level and administrative level. This helps to understand the transaction process and how the amounts levied as taxes are used.
WHY US?
The Accounting and Tax has been incorporated in 2001, and since then as a reputed Tax Consultant in Toronto, we have been helping our beloved clients by providing easy and transparent tax, audit and accounting solutions. You can easily trust us to save your hard-earned money.
Mansoor Suhail has been providing Accounting, Bookkeeping and Taxation services since 2001 in Toronto, Canada. He is fully competent in Canada and U.S.A tax filings and consultation. He can handle Personal, Small Business, Partnerships and Corporations tax issues with full confidence. He is also able to handle International tax issues for Foreign Students, Expatriates and Foreign Corporations.
