Should We still pay Taxes in "Shithole" Countries? The Chicken and Egg...

in #finance7 years ago

On the list of certainties of life, only death precedes taxes.
Everybody agrees taxes are meant to be paid for the development of the state. Infact, funny definitions have been given to taxes in the past likening it to 'the rent we pay for occupying a space in the state'.
With the general agreement that taxes are meant for powering the state, to redistribute income, close the rich-poor gap and provide social amenities, the question; 'Why does the government still deserve my money' arises in a taxpayer's mind when taxes paid have no clear cut positive effects on people's lives and there is little or no accountability for taxes Collected.

This is usually the case in a good number of developed and developing countries, my Nigeria not been an exception where prospective taxpayer's latch on to the failure of the government as a justification for their tax default.

The government on the Other hand feels it has only not been doing enough because it cannot really do anything without funds and a good source of it is Tax Revenue. So, when people complain of total lack or inadequate social amenities, the government simply responds saying; 'pay your taxes, so we can have enough money to deliver our promises'.
This results in the philosophical dilemma of chicken and Egg. Leaving us to always answer the question, which should precedes which?
A good way out of this is reaching a middle ground where the two important stakeholders in statehood, the government & the people would act on mutual agreements rather than a face off. This can be in a way of Default negotiation or tax amnesty where previous defaulters will be allowed to regularise their tax affairs without getting punished by the law and even get a good discount on their default while promising to fulfil their fiscal duty going forward.

What binds us in a state is a social contract and in a contract, when a party fails, the other is excused of liability but in this case, laws exists to punish tax default (calling it names like Evasion and others).

Eventhough you run a local government of your own (providing your own electricity, security, water and even mini-roads) & the government lacks transparency and accountability, should you still pay taxes?
I say, Yes but only after the government has made reasonable compromises for you.IMG_20180313_143409.jpg
Photo : Gallery.

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A country will never function if the taxes are abolished!

Good point, which some people fail to realize or admit.

At the same time, any taxation system must be fair and effective. And leaders must be able to attain or maintain such a system.

If any country can establish and maintain such an equitable taxation system, not only will it function well, but it will also continue to grow at a sustainable pace. And all citizens and residents will realize the great advantages of such a system. (I know, I've experienced one such system.)

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