The main purpose of taxation is to accumulate funds for the functioning of the government machineries. No government in the world can run its administrative office without funds and it has no such system incorporated in itself to generate profit from its functioning. The government’s ability to serve the people depends upon the taxes that are collected. Taxes are indispensable in the government operation and without it the government will be paralyzed.
Taxes are an amount of money collected from citizens, and they are used to provide public goods and services to benefit our communities. Taxes are amounts established in a political process of structured laws to determine how the collective cost of government services will be distributed among elements of the market economy. The two most important tax policies are the level of taxation, or how much taxes should be, and the structure of the system, or how revenue is to be raised
Taxation is the major source of our government’s income, with this fund the government can provide us with government offices, infrastructure and social services these include Medical, social security, education and other expenditures include transportation, lighting, recreation etc. These services are granted to us at no costs.
However, this does not nullify the significance of the prevailing economic situation. The above debate can be based on various economic contexts.
One is considered rich or wealthy depending on his/her financial ability. Affluence in rich people can be measured by annual income or consumption, lifetime expenditure or income, and wealth. Consistent with how the taxation system works, affluence should be measured annually.
If the government willing to spend more while their budget is inadequate (Budget deficit), the another way to find the money to satisfy their expenditure is to loan the money from the others, the process that government creates debt from borrowing money is called government debt, public debt, or national debt, which is like people loan from the financial institution but it just own by government, In present, there are many controversial between government debt create cost on future generation or not create cost on future generation, how can government debt create future generation cost, and how it will not create future generation cost. All of these we will be discuss later in this paper.
Corporate and personal income tax fraud is not a new phenomenon; it is a part of day to day business in the global economy. Where there is worship of money there seems to be fraud in one form or another.