The negative effects of Double taxation (By STEWART MBEGU & Amid A. Mgwasa)

The negative effects of Double taxation

 (By STEWART MBEGU & Amid A. Mgwasa)

How to cite this work

Mbegu. S. & Mgwasa. A. A. (2022). The negative effects of Double taxation. Idiana consultancy publication

The negative effects of Double taxation

Abstract

This article tries to analyze the definition of double taxation, the negative effects of double taxation. Double taxation is a tax principle referring to income taxes paid twice on the same source of income. It can occur when income is taxed at both the corporate level and personal level. Double taxation also occurs in international trade or investment when the same income is taxed in two different countries.

1.0 What is double taxation

According to Kagan (2022) argued that Double taxation is a tax principle referring to income taxes paid twice on the same source of income. It can occur when income is taxed at both the corporate level and personal level. Double taxation also occurs in international trade or investment when the same income is taxed in two different countries.

2.0 What are the negative effects of Double taxation?

It discourages foreign direct investments (FDI)

Virtually all governments are keen to attract foreign direct investment (FDI). It can generate new jobs, bring in new technologies and, more generally, promote growth and employment. The resulting net increase in domestic income is shared with government through taxation of wages and profits of foreign-owned companies, and possibly other taxes on business (e.g. Property tax). FDI may also positively affect domestic income through spillover effects such as the introduction of new technologies and the enhancement of human capital (skills) (Adam, 2013). Given these potential benefits, policy makers continually re-examine their tax rules to ensure they are attractive to inbound investment. Tax policies may also support direct investment abroad, as outbound investment may provide efficient access to foreign markets and production scale economies, leading to increased net domestic income (Lotha, 2015).

It increases the tax burden to taxpayers

Investors are generally willing to accept a higher host country tax burden if the country offers attractive business-enabling and market condition, a stable framework, and above all, host country location-specific profit opportunities. Indeed, in principle, the tax burden on location-specific profit could be increased up to the point where economic profit is exhausted without discouraging investment. Thus, where an economy offers an abundance of location-specific profit opportunities, policy makers may understandably resist pressures to adopt a relatively low tax burden, to avoid tax revenue losses (Sinha, 2017).

Double taxation violates the equitable (fairness) principle.

It is not unusual for a business or individual who is resident in one country to make a taxable gain (earnings, profits) in another. This person may find that he is obliged by domestic laws to pay tax on that gain locally and pay again in the country in which the gain was made. Since this is inequitable, many nations make bilateral double taxation agreements with each other. In some cases, this requires that tax be paid in the country of residence and be exempt in the country in which it arises (Julian, 2021).

3.0 Conclusion   

In a nutshell these problems of double taxation are mainly reduced or controlled by double taxation treaties (agreements) which serve to smooth the business across-boarders. Double taxation agreements require which country has taxing rights over an individual, and, if they both have such rights, which one takes significance. The agreements may agree down different rules for different types of income. They may also agree to exempt some income or gains from tax or allow a set-off of tax paid in one country against tax due in the other.

Reference

• Julian. K (2021), Problems with integrating corporate and personal income taxes in an open economy, Journal of Public Economics 48, 39-66. 

• https://www.tra.go.tz/index.php/corporation-tax/108-what-is-a-double taxation

• Lotha (2015), double taxation: The Poor (Cities) Pay More, 23 Urban Affairs Rev. 37, 50 (1987)

• Sinha P.(2014) , Double taxation:  Constraints and Objectives in an Open Economy’ (2013) 11 eJTR 284. 

How to become open minded in your business career (BY STEWART MBEGU & EBENEZA ASANTERABI)

How to become open minded in your business career (BY STEWART  MBEGU & EBENEZA ASANTERABI)

How to cite this work

Mbegu. S. & Asanterabi. E. (2022). How to become open minded in your business career Idiana consultancy publication

 How to become open minded in your business career                        

Abstract

A business career is one of the best careers one can pursue. But this largely depends on how open and ready he or she will be in learning new skills and knowledge on business. It is not guaranteed that on pursuing a business career one will get much money, but the amount of money a business man can generate largely depend on the ability of such person to be open minded in the business career.

According to a recent survey by the national association for business economics, 72% of economists believe that a recession has begun since the end of 2021. One of the side effects of this recession is increased unemployment, however an open minded businessman may help ride out this recession another recession to come. According to the graduate management admission council (GAMC), following the great recession between 2007 and 2009, 86% of the business school graduates found employment in 2011 after earning their degree. Open minded business degree graduates often enter in demand career fields such as financial management, information technology, management and human resource management.

Introduction.

An open minded person who is receptive to a wide variety of ideas, arguments, and information, being open minded is generally considered a positive quality. It is a necessary quality for a business person in order to think critically and rationally. This doesn’t mean that being open minded as a business person is necessarily easy. Being open to new ideas and experiences in the business career can sometime lead to confusion and cognitive dissonance when we learn new things that conflict with existing beliefs. Being able to change and revise outdated or incorrect beliefs is an important part of learning and personal growth.

The following are some ways to become open minded in the business career.

1. Being updated with new information in the business career.

In order for a bunnies person to become more open minded in his career he must ensure that he is following up all the updates in the business career. This is very essential because there are many changes and amendments in the business and accounting policies. Therefore in order for are business man to cope up with the increase in knowledge in the business career he or she should follow up on all the updates in the accounting career.

2. Ask yourself a lot of questions in the business career and take time to follow up on the answers.

Asking questions helps a person to explore on the unknown knowledge. In order for a business man to increase his learning speed he must ask himself many question in different aspects of his career and after asking such questions he should take time to seek the answers.

3. Be an active listener.

Make sure you take your time to listen to issues concerning the business career. This includes taking time to search in the internet to see what other professionals have said in a particular topic. This will help you to know different perspectives of different peoples In a certain topic and help to increase the knowledge in the business career.

4. Take lessons and never stop learning.

Collect all the available information and get in contact with many people as possible, in view of obtaining it. Develop a thirst for learning, peak your curiosity and don’t be afraid to say I don’t know. An open minded person understands that there is no end to the journey of knowledge and exploration.

5. Challenge limits

An open minded person in the business career is not limited by the information he is taught by his teachers, he takes time to learn from different sources. Our experience in this world is created through the filter of our own beliefs, ideas and patterns. what we get from our parents, school, the environment, what we read, etc. but we must be aware that our viewpoint is limited and subjective, and we stand to gain much more from acknowledging and accepting another’s person  perspectives. 

Conclusion

Therefore in order to be open-minded in the business career one has to exchange ideas regularly with colleagues, accept criticisms without bitterness; appreciate and celebrate other people’s achievements; be flexible towards altering tasks, assignments or schedules; request feedback from fellow colleagues or lectures, encourage open mind attitude to others. Be patient etc. a closed mind tends to make error in judgment, but a positive attitude towards new experiences can lead to new discoveries each day, making your career fun and exciting.

How does Value Added Tax works in Tanzania?. (BY STEWART MBEGU AND NAKADORI YOHANA MJEMA)

 How does Value Added Tax works in Tanzania?. 

(BY STEWART MBEGU AND NAKADORI YOHANA MJEMA)

How cite this work

Mbegu. S. & Mjema. N. Y. (2022). How does Value Added Tax works in Tanzania?. Idiana consultancy publication

Abstract

In Tanzania,there different types of tax which are payed  by different people  in business and residential. One of them being Value added tax (VAT).This kind of tax have been significant in addition of domestic revenue in Tanzania.One can ask  is it important to pay it? This article will have all the answers who supporsed to pay and when.

INTRODUCTION

A value-added tax (VAT), known in some countries as a goods and services tax (GST), is a type of tax that is assessed incrementally. It is levied on the price of a product or service at each stage of production, distribution, or sale to the end consumer. If the ultimate consumer is a business that collects and pays to the government VAT on its products or services, it can reclaim the tax paid. It is similar to, and is often compared with, a sales tax. VAT is an indirect tax because the person who ultimately pays the tax isn't necessarily the same person as the one who pays the tax to the tax authorities.

Not all localities require VAT to be charged, and exports are often exempt. VAT is usually implemented as a destination-based tax, where the tax rate is based on the location of the consumer and applied to the sales price. The terms VAT, GST, and the more general consumption tax are sometimes used interchangeably. VAT raises about a fifth of total tax revenues both worldwide and among the members of the Organisation for Economic Co-operation and Development (OECD). (Bickley, James M. (3 January 2008).   As of 2018, 166 of the 193 countries with full UN membership employ a VAT, including all OECD members except the United States,[a) where many states use a sales tax system instead.

Germany and France were the first countries to implement VAT, doing so in the form of a general consumption tax during World War I. ( Helgason, Agnar Freyr (2017).The modern variation of VAT was first implemented by France in 1954 in Ivory Coast (Côte d'Ivoire) colony. Recognizing the experiment as successful, the French introduced it in 1958. (Helgason, Agnar Freyr (2017).Maurice Lauré, Joint Director of the France Tax Authority, the Direction Générale des Impôts implemented VAT on 10 April 1954, although German industrialist Wilhelm von Siemens proposed the concept in 1918. Initially directed at large businesses, it was extended over time to include all business sectors. In France it is the most important source of state finance, accounting for nearly 50% of state revenues. (Beram, Philip ,2016)

A 2017 study found that the adoption of VAT is strongly linked to countries with corporatist institutions (Helgason, Agnar Freyr (2017).

VAT IN TANZANIA

A VAT return is a form used to submit tax payments to TRA. Currently VAT registered traders are supposed to submit returns to TRA online through e-filing or in paper form.VAT is payable on 20th day of the following month of the business that is a due date of submitting the return. If the 20th day falls on the Saturdays, Sunday, or public holiday the return shall be lodge on the first working day following the Saturdays, Sunday or Public day

What are the applicable rates under VAT?

VAT is chargeable on the taxable supplies of goods and services. The rates are as follows: -

 

How does VAT works?

 Each registered person in the chain between the first supplier and the final purchaser or user is charged tax on taxable supplies made to him (input tax) and charges tax on taxable supplies made by him (output tax).  He pays to the TRA the excess of output tax over input tax, or recovers the excess of input tax over output tax from the Authority. The broad effect of the scheme is that businesses are not affected by VAT except in so far as they are required to administer it, and the burden of the tax falls to the final consumer.

REFERENCE

Consumption Tax Trends 2018: VAT/GST and excise rates, trends and policy issues. Consumption Tax Trends. Secretary-General of the OECD. 2018. doi:10.1787/ctt-2018-en. ISBN 978-92-64-22394-3. S2CID 239487087. Retrieved 24 September2016.

Bickley, James M. (3 January 2008). Value-Added Tax: A New U.S. Revenue Source? (PDF) (Report). Congressional Research Service. pp. 1, 3. RL33619. Archived (PDF) from the original on 28 June 2016. Retrieved 24 September 2016.

Cole, Alan (29 October 2015). "Ted Cruz's "Business Flat Tax:" A Primer". Tax Policy Blog. Tax Foundation. Retrieved 24 September 2016.

Beram, Philip. An Introduction to the Value Added Tax (VAT) (PDF) (Report). United States Chamber of Commerce. Archived (PDF) from the original on 24 September 2016. Retrieved 24 September 2016.

Tanzania Revenue Authority(2022)

 Helgason, Agnar Freyr (2017). "Unleashing the 'money machine': the domestic political foundations of VAT adoption". Socio-Economic Review. 15 (4): 797–813. doi:10.1093/ser/mwx004