Is it important to pay tax as individual....

[nfeoffice]

All citizens of a country are morally and legally bound to pay their fair share of tax. The importance of paying taxes to the government and why we should not do the mistake of hiding money or avoiding taxes. A large percentage of people who pay tax think as if government is trying to steal their hard earned money .. well thats not true. Money collected from taxes help a country to become stronger and help government provide a variety of services to its citizens.

Example of some services that government provides with our tax money:

1. Infrastructure Projects: Government needs money to build roads, bridges, dams and number of other projects which are available to the society as a whole.

2. Public Security: Money collected from taxes is used to provide police and fire departments. It also helps to fund money needed to maintain defense forces (army, navy and air-force) and buy arms for them.

3. General services: Keeping roads clean, water treatment, street lights, trash removal and maintenance of public parks requires lot of money.

4. Health Services: Almost all governments provide some level of free or subsidized health services to its citizens. This may include preventive immunization shots, disaster relief and many others. All this money is funded by the tax money you and I pay.

5. The list goes on: Maintenance of historic monuments, government aid, emergency relief, conduct elections, run several government institutions like department for agriculture, commerce, energy, urban development, treasury, judiciary, department of motor vehicles etc.

Types of taxes:
Government can impose taxes in many forms, for example: Income tax, Sales tax, Excise tax, Toll Tax, Recreation tax, social security, medicare etc ..

Does everyone has to pay tax?
It depends on country to country, but in most cases people with very low income do not have to pay tax.

Does everyone pay same tax?
Usually people with higher income pay a higher percentage of tax than the people with lower income.

Why should I still have to pay tax?
Think about this, if we only paid for the services we need then there is no way we could afford it. For example if you wanted to go from City A to City B, can you afford to pay for the construction of road that connects those two cities.. NO. You open tap and clean water flows out of it, if we were to put a filtration system on our own and a pipe that connects all the way to the nearby reservoir, it will cost just too much. Therefore we pay for these services in form of tax and use them as a whole society.

The result of not paying taxes could result in penalty and prison time. So next time when the time comes to pay taxes, do not feel too bad. It is your contribution to the services you receive in return.

Source: http://www.saching.com

[saratasneem]

Obviously it is important to pay tax. And we are paying taxes directly or indirectly. But it seems to me that there is a gap between tax revenue and proper utilization of that revenue. We expect better services from our country in future.

[nfeoffice]

me too....

[sakhawat]

Thank you for your valuable information.

We know that tax is a contribution to the society from our income and which is compulsorily payable to the govt.
It is general that a higher income earning person has to pay proportionately more tax than the lower income earning persons. But when
we find that a beggar has to pay tax indirectly through the process of VAT (Value Added Tax) than I did not find the justification
of tax as a system of social contribution. The government is elected to alleviate poverty by taking good initiatives. But the reality is that a beggar is paying tax which is really very unfortunate. So, we should encourage people to pay tax  on the otherhand we should be canscious regarding the way how we are  paying tax. Whether it really benefits to the society or it benefits our government to misuse public money as they are willing.Our consciousness may change our motherland as a dreamland.




Thanks again.

Mohammed Sakhawat Hossain, ACMA
Assistant Professor & Coordinator,
MBA Program
 

[saja]

Every organization pays tax on their net profit(revenue-expense=net profit). but individual pays tax on their all income which may come from salary, household, business etc. My question is that individual should pay tax on their net surplus (All income -All expense=net surplus).  For example:
                               Mr. rahim is a employee of a company. he takes salary TK.50,000 per month.He has 11 sons and 4 daughter . His monthly expense is TK.45000 totally. I think that his taxable income should be TK.5000. But govt. charges tax on his total income TK.50000.So Rahim will face problem.

[nature]

Paying tax is also the way of improving our country. So we all trying to pay tax.

[bipasha]

good post

[sethy]

Nice post. As a citizen we get many benefit from a country. The money which is collected by tax is used for the development of our country. So it is our duty to pay tax in due time.

[sakhawat]

An individual has to pay tan on his total income this is not true at all. We have to pay our tax on our taxable income.
For Example:
 Your monthly basic salary is Tk 20,000
Monthly House Rent Allowance is Tk 10,000
So, your gross salary per month is Tk 30,000
Your annual total salary is Tk 30,000 X 12 = Tk 360,000
But your total annual taxable income is here as follows:
 Basic Salary (fully taxable)         Tk20,000X12      =                                    Tk  240,000
 House rent allowance                Tk 10,000X12      = 120,000
Less: Exempted up to the lower of
                                 50 % of Basic salary
                            or Tk15,000 per month                   120,00                              00

So, here total taxable income is Tk 240,000.
Now, you have to pay tax @10% only on Tk 40,000 out of Tk 240,000 (for male person).

So, we have to pay tax on our total income this is not true.

Thanks.

[zaidi]

Thank you Sakhawat for your effective post and the example, though you are doing a lot for us to calculate(TAX) such critical and complex thing. thank you again.

A.K.M. Zaidi Satter
Faculty,BBA program

[sayma]

Thank you sakhawat sir for your important and useful post with example. It will help us.

Sayma Suraiya
Sr. Lecturer
BBA Program

[tanzina_diu]

Thanks Shakhawat for your valuable post. Assessment time is coming soon. Hope, your post will help us.

[sakhawat]

As Tanzina Madam mentioned here that our next assessment year is coming soon that is 2013-2014 and our last date of submission of tax return is September 30, 2013, so, we need to get prepared to minimize our tax liability as per income tax ordinance 1984.

We must remember one thing that whether our investment is sufficient and appropriate to get maximum rebate on our investment that will reduce our tax liability. How you will make it sure?

So, if you have any query regarding your personal tax, please feel free to ask any question. I will be here to provide the solution.

Thanks.

[sakhawat]

If you have any query regarding income tax than please give your post to the  topic titled " Income Tax for Individual" .

Thanks