What is a Tax Policy?
The term tax policy is used to describe the choice which will be made by the government on what taxes to levy to its citizen and to whom those taxes will be levied onto. Both developing and developed countries have different levels of tax policies that govern their government when it comes to the taxation matter.
For any tax policy that the government chooses there will be adverse macro and micro-economic effects which can be detrimental to the level of economic performance. Some of the forms of effective tax policy for developing nations include the following.
Tax Policies for Developing Nations
There a lot of forwarding and out looking tax policies that are adopted by different developing companies. This policy ensures that the taxation outcome that is being intended to achieve much in a given financial taxation year is well achieved.
There is a review of old taxation policies and education is being provided on the new tax policies. The main aim of this changes is to ensure that our forward-looking tax system policies enumerate that for developed nations.
Developing countries are developing tax policies that are innovative, flexible and creative
Generally, excellent policy making entails a process that is not rigid to change and can transform easily to any needs at given time forms. Up to date tax policies that have been developed in developing countries have enumerated much of the developed nations.
The tax base has been widened and this has seen a list of major areas which were not previously taxed fall into the tax base. A good example is that in most developing countries, politicians were exempted from paying taxes but nowadays they pay a lot of taxes to the government.
Tax policies that have improved tax administration process
With technology becoming widespread in Africa, the process of tax administration has been revolutionized. We have shifted from filling in the tax forms manually to filling of the tax forms in the digital platform. We can review the amount of tax we pay to our government at our own will.
This has degraded corruption on a major scale as tax audits may deter some individual from syphoning out Government’s money.
To encourage development and improve the attitude of people towards work which could probably grow developing countries economy to be a twenty-four-hour economy, developing countries have introduced tax cuts to an individual who earns less amount of salary in an economy. Tax cuts have been seen as a way of improving the economic living standards of the low earners and motivating them to work for future economic growth and development in a country.
Development of tax reforms for funding higher education and children saving policy has formed an integral part in the revamping process of tax policies for developing nations. There are lot of reforms that are still in the piloting stage but we hope that once they are implemented to the 14 fullest, money will be spent wisely by the government.