All we ever hear is the word tax, but what exactly is it?

Everyone pays tax in one form or another but do you know why you pay tax?

Do you ever question yourself as to where it is going and what benefit you’re getting out of it?

The National Health Service and the emergency services are only some of the services which are supported by your paid tax, not forgetting your children’s education, safe roads, and prisons, the list is endless.

Now you are probably asking but why must you pay for some of the services you may never use.

If every individual paid for only services they used, it would be unaffordable regardless to whether you could pay for it or not.  You would be in constant arrears, but our UK tax system is fair up to the point that it is based on our ability to pay.  Therefore the higher your earnings are the higher the tax you pay.

Tax is charged by the Government and the purpose of taxation is to finance the government expenditure. (More will be found on History of tax which is to follow shortly be tuned).

There are two types of taxes which are direct tax and indirect tax.

Tax levied directly on personal income is direct tax and any taxes levied on products or services are indirect taxes.

 

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One thought on “All we ever hear is the word tax, but what exactly is it?

  1. Hi Shenaz,

    I enjoyed your blog! I always say that taxpayers are shareholders in the country’s assets. And taxpayers can be anybody who shops and pays VAT on products, including children. When governments (as they have done over the past 35 years) “privatise” our assets, the country and the taxpayer are the losers, especially as most of these assets become foreign owned. Thanks for reading and God bless!

    Danny Kelly

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