Can an Economy Survive Without Tax Imposition on Her Citizens?
Yes because tax imposition is not the only determinant for economic growth and stability.
YES. Economy of a country can survive with out her citizens paying tax, for example, in Nigeria, except salary earners and very few cooperations, Nigerias don’t pay tax, yet our economy have been surviving before our current government.
Taxation has two forms indirect and direct taxation. Very few individuals think indirect taxes are not taxes since the tax burden to individuals is not felt directly. No country in the world can exist without tax. Taxation is as old as mankind, the only difference is the way how it is collected
The word taxation has wider meaning. Personal Income Tax, Corporate Tax, Gift Tax, Wealth Tax, Octroi, Customs Duty, Excise Duty, Anti Dumping Duty etc.
Personal Income Tax – Consider the middle eastern countries like saudi arabia, Oman, Qatar, without collecting tax from residents.
Corporate Income Tax – Governments if required are providing Tax holidays to improve some sectors.
Wealth Tax, Gift Tax – Government exempts based on certain limits.
Indirect Taxes like Customs Duty and Excise Duty – Depending on the products being exported/Imported and manufactured within the country, governments decides to apply differing rates with even exemptions for essential goods,
Anti Dumping Duty – To protect the country’s sectors like agriculture and industrial goods, governments may impose anti dumping duties to prevent foreign countries from dumping their goods.
However, without collecting any taxes, it would be difficult for governments manage all its requirements.
No, because no country can exist without tax
Governments of many countries have no source of income but tax. People must participate in governing and managing the country by paying tax. If people don’t pay tax, then how governments are supposed to work??? How they build schools, hospitals, roads, etc? How does the police want to protect people and society? How is army going to protect the country borders???
I believe that the tax system is as old as time itself. I stated that I do have a faith and belief in the spiritual. To this day many people see that you are to pay Careers things to Caesar and Gods things to God. This is what remains. Government though should try to make changes from time to time about taxation.
Taxation is not necessary. Since governments print the money they use, all they have to do is credit themselves the amount necessary to run government.
Money printed by government must be equal to production, if there is no production ,high rate of inflation may come in .this is dangerous to the economy, do you remember in Zimbabwe to buy a bread you would carry wheelbarrow of money. Foreign exchange rate become to high this will hinder necessary importation of goods and services.
Unfortunately governments do not have money of their own and they must tax their citizens to enable them to pay for certain services. Here in Australia we have an income tax system and we have a broad based consumption tax commonly called a GST (Goods and Services Tax). Unfortunately as Ben suggested in an earlier post that governments can print money and use this to pay for services this will not work as governments can control the amount of money that is cycling around an economy by taxing its citizens and by doing this it can control the level of spending in the economy. The more that governments pump money into an economy the higher inflation and the economy goes out of control. All governments control their economies through the use of fiscal and monetary policy. Once again in Australia our government allows the Reserve Bank to control monetary policy obviously under strict guidelines that are set in the budget. Taxes imposed by governments on their citizens are extremely important.
taxation is the major source of government revenue.countries perform their duties after collection of tax.social services like health, education, water and economic services like roads,power provision would be impossible for government to achieve without taxation. In Uganda for example more than 60% of the budget is funded by import, export, exercise duty taxes.the remaining percent which is foreign aid is also paid back by individuals after tax collection. When you here of government in the world that is taxation, money, government can use taxation to achieve monetary and fiscal policies, control inflation, reduce income inequality and more important government can use taxation to control production of harmful products among the population.
Taxation is good. Government can’t survive without imposing tax on her citizens. The sad story as it concerned my country Nigeria is that government does not even create jobs or create enabling environment for productivity so that Tax can be collected. The system collapse is inevitable and inflation must set in as government has no option but to print money.
To me Tax imposition on citizen = Job creation
Governments can’t function without taxation. They won’t be able to provide the necessary goods and services. Kuwait does not tax its citizens but taxes foreign companies. Government funding comes mainly from oil exports. If there was no oil in that country – or if the oil wells run dry- taxes would be promptly imposed.
Thank you David 🙂
An economy cannot survive without taxation as this is what drives economic growth and development. All the things people often forget about and take for granted such as health system, education, roads and railways etc where does the money come from to provide these – taxation. Whether it be in the form of personal or business tax it is vital
True… Thank you!
I suppose if you are in Saudi Arabia or the UAE where the government gets money from oil or maybe third world economies where it is mostly subsistence and inflation is running at enormous rates.
I think you will find that advanced economies rely on tax to survive and provide essential services to their people.
Even the Romans in the time of Christ collected taxes.
I think what you mean is not an economy but a country.
A country can survive without imposing tax on its citizen only when the percentage of its national budget from tax is very low. In other words, the country should has a strong income outside tax if it want to survive without taxing its people. United States is unarguably the strongest nation in the world and 93% of its federal revenue comes from tax (See this page for the detailed figures). The similar figure also exist in developing country such as Indonesia where 86% of its national budget comes from tax. However, a country like Saudi Arabia has a national revenue which consist mostly from non income tax. 68% of Saudi Arabian revenue (in 2019) come from oil revenue, while the other 32% is a combination of non-oil revenue including tax. Thus, a country like Saudi Arabia would have greater chance to survive without taxing its citizen than the US or Indonesia.
So, the answer is depended on the revenue structure of a particular country.
Hi,my colleague,we have different forms of tax.most of us still believe paying tax is from pocket directly.however indirect tax is paid by individuals eg a manufacturer may pay tax in case of Nigeria where corporations pay, they shift this to the price of product or service.when you use that product you are paying tax .
Yes, almost no goods we consume are free of tax.
Experts have been known to say that indirect taxes are better than income taxes as they encourage people to spend more and therefore pay more tax. I know in Australia we have a broad based consumption tax and we have an income tax that is applied on a progressive scale and there are other indirect taxes imposed on Australians. The government is also trying to find ways of ensuring multinationals such as MIcrosoft and Google pay their share of income tax on earnings made here in Australia.
We almost paid indirectly to all kinds of taxes. For example, we eat a cup of coffee. We have paid several company taxes by consuming just a cup of coffee. We paid the taxes of the coffee mill company, the sugar mill company, and the taxes of the manufacturer of the cup by which the coffee is contained. Of course, we paid the consumption tax and the cafe’s tax where we drink the coffee.
Although I said that there are a company and income taxes in my previous comment, I did not mean that they must be in a direct tax form. The government imposes the tax on the companies, and they pass it through to the consumer.
Countries should think of other ways to generate revenue rather than relying so much on taxes
It’s very difficult to any country to survive without taxes . Perhaps it can reduce the % of tax collected from its citizens. Citizens paying many type of taxes , at times amounting to over 40% in total .