 Written by Anand Tomar: (Lecturer, UK College of Business and Computing, London) Why are we paying tax? A critical question was asked by my son ‘Aryan’, who is just 10 years old and studying in his year 5. I answered that our government needs money to maintain the Parks, Gardens, Roads, Rails, Buses, Pay the Salary to Police, Council Workers, Doctors, NHS Workers, Royal Mail Workers and so on. The next question was, how do we know if we are getting all these right for the money we pay? This is certainly a very big question to answer. I was thinking that I did a good job by providing him the satisfactory answer to the first question, but the second was bothering me from thenAs our lives are defined by the IT in this Hi-Tec era where information on anything is available on our fingertips I knocked the door of our ‘Google Uncle’ for getting the correct answer. I found following:- Taxes are collected from citizens by the government to accomplish a series of objectives, namely:
There is a thought in the back of mind that some Tax Free countries successfully existing on this planet earth, they are-
Can every single country in the world become tax free? The answer is ‘NO’ because only nations with their own central bank and their own currency have the ability to create their own money and use it as they see fit. Countries for example Greece, France and Germany cannot do this because they use the Euro and are therefore dependent on the European Central Bank to create money for their economies. But nations such as India, America, Iceland, Japan, The UK can create their own money and spend according to their wish without borrowing from any other nations. It is my strong opinion that nations should create their own money and inject it right into the vein of the economy to cure financial flu (crisis) and help their citizens. So The UK should create its own money, there is in fact no need to borrow it from private banks. It can just "borrow" from the Bank of England which is what happens in the case of quantitative easing. Although it wouldn't really be "borrowing" in the usual sense because it owns the Bank of England, so would be borrowing from itself. Either way, if the government doesn't need to borrow money from private banks, it doesn't need to pay them interest. (Huffington Post UK) How the Government will operate without taxes? Revenue for the nation can be generated by developing travel and tourism, infrastructure, good opportunities for talented and skilled human beings rather than by imposing taxes. If every nation practice this then they will become tax free country, which allows the citizens to enjoy and spend their hard-earned money as and when they wish to. So with the help of this article, I would like to place a humble request to the Policy Makers/ Politicians/ Prime Ministers/ Finance Ministers and each and every person who is directly or indirectly involved in the process from all the capable nations to think on it and come up with this applicable and practical solution and get rid of these heavy taxes. The answer to the second question is, the benefits of taxes are often perceived or intangible sometimes. Something like an Insurance, a Hospital or an emergency service that you may not use it every day – but you need it most when you need it. Hence, we need to pay the tax, while exploring the avenues on how governments can think of revenue generation with less tax implications. References
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