How Can Zimra Widen Its Tax Base

HOW ZIMRA CAN EXTEND THE TAX NET

THE REASON FOR TAXATION

Funds provided by taxation have been used by states and their functionary equivalents throughout history to carry out many functions. Some of these include expenditures on war, the enforcement of law and public order, protection of property, economic infrastructure (roads, legal tender, enforcement of contracts, etc), public works, social engineering, and the operation of government itself. Most modern governments also use taxes to fund welfare and public services. These services can include education systems, health care systems, and pensions for the elderly, unemployment benefits, and public transportation.

Energy, water and waste management systems are also vital common public utilities. Colonial and modern states have also used cash taxes to draw or force reluctant subsistence producers into cash economies. Governments use different kinds of taxes and vary the tax rates. This is done to distribute the tax burden among individuals or classes of the population involved in taxable activities, such as businesses, or to redistribute resources between individuals as well as classes in the population. Historically, the nobility were supported by taxes on the poor; modern social security systems are intended to support the poor, the disabled, or the retired by taxes on those who are still working. In addition, taxes are applied to fund foreign and military aid, to influe-

nce the macroeconomic performance of the economy (the government’s strategy for doing this is called its fiscal policy), or to modify patterns of consumption or employment within an economy, by taking some classes of transaction more or less attractive.

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DECIDING WHICH IS THE BEST TAX SYSTEM

No one likes taxes, but they are a necessary evil in any civilized society. Whether you believe in big government or small, governments must have some resources in order to...