Welcome once again. Today we are revisiting the topic of taxation. I guess you cannot do without tax as long as you are in business on this earth. I’m not sure whether aliens get involved in tax but they could. In that case the tax could be just as weird and complicated as the tales about alien life we sometimes read about in the press. Far different from what we know about God. So, I’m talking about taxation in real business on earth. I say real business because some folks get involved in some shady things they call business. If you are involved in some shadow dealings possibly you could do without tax. You know I would be the last person to advise you to participate in shady deals.
I’m going further in this taxation idea because there are so many entrepreneurs out there who mess up their enterprises and lives simply because of tax. Some time back I wrote about Key Tax Planning Issues An Entrepreneur Must Know. When tax issues get complicated due to your non-compliance, you have only yourself to blame. By the time it gets to your bank account being controlled by the tax guys, you begin to realize you have carried that game too far. Candidly, I think you do well to have some reasonable level of tax and other regulatory compliance. I’m not telling you to carry all your money and give it to the taxman. If you allow the taxman to insert a huge needle and get too serious with that painful tax (blood) transfusion, it’s up to you. You can regulate that process; less your ignorance works against you.
Today, I want to write about the common tax types an entrepreneur must know. While many entrepreneurs know these very well, and are doing their best to comply, others have no clue and only get to know their non-compliance through Best of Judgment (BOJ) assessments with compounded interest and penalties calculated by the tax authorities. This is not interesting at all. By the time you negotiate your way out of the crisis you will have lost a lot of time and money. The laws also make some of these penalties and interest non-negotiable hence you could be in deep waters. So, what are some of the common tax types an entrepreneur must know? Which tax types are usually found in many tax jurisdictions across the world? The below are some though the list may not be exhaustive as I have not had the privilege to study tax regimes globally.
Surely – it has been a long write-up today, but I thought it necessary to do so. Many entrepreneurs in different locations worldwide never or hardly pay attention to these issues. More so, people don’t like paying tax. You can’t entirely blame them. If you live in some parts of the world where every week you read stories of government tax monies (big amounts) being stolen and transferred into personal pockets instead of providing value and services to society, then your appetite for paying tax might seriously dwindle. Nevertheless, we live in a world of taxation, and hence some reasonable compliance is expected from all of us. We also enjoy some benefits of taxes such as national security, infrastructure etc. Don’t we? We drive our cars on good (and sometimes terrible) roads. We might also be lucky to enjoy government funded schools, and hospitals (often with inadequate drugs though). They are funded by taxes.
Please my dear entrepreneur; get to know some of these critical things about the above taxes and any other additional ones as the above is not exhaustive. I’m more than sure that this knowledge will help you improve your tax compliance and avoid non-compliance problems in future in your enterprise. You can’t successfully fight or avoid the government, can you? Better be smart and safeguard the future of your business because this single factor of tax non-compliance could easily wipe out your business. I’m not joking by the way! If you look critically in whichever part of the world you live in, I guess you could identify some businesses that went under, or whose operations were severely adversely affected by the taxman. Forewarned is forearmed.
Have a fantabulous new week.
The Wise Entrepreneur