The rush to remit annual tax returns ahead of the June 30 deadline is about to take place yet again. The annual tax returns cycle has perhaps become too commonplace to elicit deeper questions on taxation and laws that govern it.
The taxation phenomenon is not new. “Render unto Caesar the things that are Caesar’s, and unto God the things that are God’s” is a well-known edict in certain circles. In this popular Matthew 22:21 Bible verse, Jesus sought to solve the then heated debate regarding the relationship between Christianity, secular government and society.
Specifically, the response was directly related to a question Jesus was asked regarding whether it was lawful for Jews to pay taxes to the government. This issue remains as relevant and controversial today as it was back in the day.
Think about it. Where does the government get funds to operate? Who foots the bill for the roads we drive on every day? Who pays the salaries of civil servants and meets the cost of drugs citizens get in hospitals?
It is rather obvious that the money has to come from a dedicated pool. But to fill this pool in order to keep the country functioning efficiently, citizens have to play their role of paying taxes. Indeed, it has been said that taxation is the only known practical manner for collecting resources in order to finance public expenditure for goods and services consumed by any citizenry.
Not all citizens are ready to pay taxes without some sort of incentive or coercion. That is one reason for taxation laws.
Some citizens may try to evade this crucial requirement of paying tax but in the fullness of time, their actions come back to haunt them. For instance, many citizens have lost lucrative contracts or opportunities to get plum jobs simply because their tax records lock them out.
There are two main categories of tax evaders. Those who fail to file their tax returns as a way of ‘stealing’ and persons who have no idea of their legal tax obligations. But as they say, ignorance is no defence against the law.
Contrary to popular belief, tax laws are not the preserve of lawyers or financial experts. A country’s tax law covers the rules, policies and laws that oversee the tax process. The law stipulates various levies on things like estates, transactions, property, income and licenses.
Arising from the 2010 Constitution, the country has a two-tier tax system; the national government and counties.
The former retained powers to impose direct taxes including income taxes and indirect ones like value added tax (VAT), excise duty and customs or import duty.
Counties were given powers to impose taxes on property, entertainment and other taxes that are feasible at this jurisdiction.
Ultimately, every citizen pays taxes in one form or another. Abdicating this responsibility places the burden more on others, and compromises the quality and quantity of public services that the government offers.
The writer is a tax and audit expert.