Most of the developing countries in the present time have shown a profitable performance in their respective economies. Most of the MNC’s that have opened their corporate branches in these countries and even the indigenous industries are getting enough monetary assistance from the government. It is the responsibility of the industries to pay their taxes on time and the individuals who are earning well in developing countries. The reports and inputs from International Tax & Investment Center have stated that the taxes levied in the developing countries are low as compared to developed countries.
Implementation of Tough Tax Laws
As the developing companies are also making a good amount of money both in the industrial and the service sector so the tougher tax laws can only help in reaching the level of sustainable development. Some individuals and companies evade taxes that generate lower tax revenues and in return, the government is only able to support general policies, armed forces and the judiciary. According to International Tax & Investment Center, if the stringent laws will be made for the people and the corporate sectors then it will help in the generation of revenue and results in sustainable development. These under-mentioned points states the benefits of the implementing of tougher tax laws:-
- Mobilization of Resources: – The resources that belong to the developing countries can be used to their full capacity with the help of latest technology. This can only be done if everyone pays the taxes and with that, the new and latest equipments can be purchased.
- Achieving Sustainable Development: – The higher taxes and tough taxation laws will help in generating more revenue. This will help in sustaining the lives of many people and the development of the nation as a whole. It will bring an end to poverty, hunger, unemployment, irregular earnings etc. The finances will support the education of children, gender equality, good medical facilities, resolving energy crisis etc.
- Check on Illicit Cash Flows: – The tough taxation policies in the developing countries will help in putting a check on evasion of taxes. This will also help in keeping a check on any kind of black money that is dumped in other countries and adversely affecting the financial economy of the country.
- Fair taxation policies: – In the developing countries, wealth is only concentrated in the hand of few people as most of the people only have human capital and their skills. In this situation, it can be seen that with tougher tax laws the capital will be equally distributed in the economy with the help of respective tax slabs. This will also help in minimizing tax evasion and the principle of equality in income will be achieved by the economy of these developing countries.
From the above points, it can be seen that with the help of tough taxation laws and the inputs from an organization like International Tax & Investment Center, the government gets the help to frame rules and regulations. It also helps in achieving the goals of development set up in these developing countries.