What benefits does the country get by collecting income taxes?
The reasons why countries collect taxes vary. Some of the reasons are financial, i.e. the country uses tax money to improve and develop services in the country, or to undertake new projects in the country. There are also some economic reasons, as the country imposes high taxes to reduce financial inflation. There could also be done for social purposes, when the state uses this money to do business and provide social services for the citizens.
Types of Taxes
Types of taxes can be classified in many ways, but the most common types of taxation are as follows:
Capital Return Tax
Collected when someone sells any property, stock or land.
Value Added Tax (VAT)
The country imposes this tax on all stages of production. For example: When iron factories produce and sell iron, the country gets a percentage of the sale value. When iron buyers use it to make a product, suppose it was a mobile phone, and sell it to mobile phone stores, the country also gets a percentage of the sale value. Finally, when the customer purchases this phone, there is also a tax collected.
Imposed on the capital owned by the company, or on the businesses they do.
Differs depending on the salary the citizen receives. The country increases the tax rate for people with high income.
When shipping any product abroad, the country imposes customs duties on this product.