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Series of steps
The efforts and pace of tax reform are accelerating, despite obvious flaws, but the reform of the tax system is still unclear and far from being implemented, based on the tax policy of linking reform with the economy of financial policy, achieving tax justice by simplifying the tax system and excluding the tax burden of the poor and low-income groups, broadening the tax base, rationalizing tax rates, harmonizing tax tools and concepts, and excluding human factors through technology. Of course, what happened and is happening in this document is not far from these steps, but it is slow in amending regulations and laws and deviates from the stability of procedural steps and does not move or postpone other transitional stages on the road to tax reform.
It is worrying that the efforts of various financial institutions to convince taxpayers that taxation is one of the factors that guarantee the continuation of their economic and commercial activities, since the consideration related to it – namely, taxation – is an important source of fiscal resources, has not made significant progress, and taxation remains in the minds of the people as an economic burden on taxpayers who do not hesitate to evade it by any means, which is the main tool of fiscal policy. Governments mobilize public and private economic surpluses to finance development and influence investment, production, consumption, savings and employment.
Economist Mohammed Abu Akif defines the development objectives of tax policy as three goals: the first is fiscal, which focuses on mobilizing revenue to finance public and development expenditures; the second is economic, which seeks to achieve development trends through public and private investment; the third is social, involving the redistribution of income and wealth among members of society, alleviating social disparities by encouraging savings and consumption, which is why successive governments during crises should use taxation to achieve social goals by freeing up revenue for the lowest income groups.
There is no doubt that achieving tax justice is necessary to stimulate investment and production to increase revenue and reduce tax evasion, provided that taxes are used in a proportional and not permanent form, while reducing taxes to encourage demand and stimulate production, and it is a fundamental pillar in the hands of the government to use incentives and tax facilities to direct private investment to specific sectors desired by the government, thereby providing more attractive benefits to these sectors, thereby reducing production costs. This is the impact of taxation on development.
On the other hand, Abu Akif believes that tax evasion is an obstacle to development, since it is usually based on a liberal economic policy model that is unfavorable to the business sector and the rich, with high taxes. It is estimated that tax evasion amounts to 400 billion liras, 70% of which is in the hands of … major taxpayers, and therefore, it is a fiscal and economic obstacle to the development task, since it releases a significant part of public revenues to the benefit of the system of financial and economic corruption, increases the budget deficit, internal borrowing, deficit financing, as well as inflation, affects the decline in public investment, and thus in national income.
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