Taxation Essay Example | Topics and Well Written Essays - 1500 words - 1

revenue enhancementation - Essay Example28). Therefore, from this claim the population who own many assets or earn some good salaries pay more to the governing manger taxation. Taxation is, therefore, necessary in order to meet the cost of expenses and in the running of day-to-day government affairs. It is the sole responsibility of the government to imbibe taxes and ensure that it is carefully spent for the benefit of the citizens (Mirrlees & Adam, 2011 p. 39). Taxation is the chief(prenominal) means through which governments raise the required money to pay for commodities and services that they provide for the people. In fact, just about governments depend on taxes to pay for the major portion of their spending since it is their major source of revenue. It is important to telephone line that, governments are always under pressure from citizens demanding quality education, health care, security and infrastructure (Lymer & Hasseldine, 2002 p. 17). Taxes at the local anaesthe tic level are necessary for construction of classrooms, public libraries, security service stations, sport facilities, as easily as for the payment of municipal employees and county directors government revenues (obtained from taxes) are essential. The government to run the cipher without borrowing grants from other countries uses taxes (Ahmad, 1999 p. 82). However, taxation is not the only way governments use to stash money for their spending. Governments wadnas headspring levy a variety of users to pay for bridges, parks, and sports stadiums among other services to get revenue from users rather than the taxpayers (Barro & Boskin, 1978 p. 125). In addition, Governments also borrow funds to support their tax revenues whenever they run short of target in budget (Claus, 2010). The standard of living of the modern society demands taxation by only means, this is because the government must collect taxes in order to meet the needs, wants and demands of its citizenry. No government can exist without taxation, though taxation can never exist without the government, as well. One could, therefore, argue that taxation is a necessity for the governments to run all the activities aimed at improving the living standards of the citizens all over the world (Keen & Smith, 2000 p 40). The value added tax is a form of consumption tax. This is the tax imposed on to the buyer when purchasing goods from any dealer whereas on the prospect of the seller, it is the tax imposed on the product, service or the material from an accounting point of berth from the producer (James, 2009 p 13). The final consumer is taxed in this way and hence, the total tax levied at each face is what makes continuous chain of supply thus, collection of VAT is borne by the business but not the state. Tax merits The collection of VAT in the UK has a number of merits for instance it en able-bodieds the government to create a stronger bonus to collect revenues even through the sales tax are low. This is because the final consumer of the product cannot easily prorogue payment unlike trough the previous method and does not give the seller the legality to collect it. The UK government has been able to balance the amount of taxes collected per year through VAT since the seller is the motivator of the buyer but has no direct economic incentive to collect it (Bird, 1999 p 25). It has also been able to balance the application of equal taxes to each member of the production chain without much care on the position in it and