The national government imposes income tax on the net taxable income of the taxpayers,
while also imposing a business tax on the gross sales or receipts before deducting the
cost of sales or service and expenses. This is a form of indirect double taxation per se.
What is your stand on this scheme? Do you agree with this or not? Explain your opinion
and support your answer on this matter.
I do not agree to the notion of imposing business tax on the gross sales or receipts before
deducting the cost of sales or service and expenses, while also imposing net taxable
income of the taxpayers. The gross sales of the business, as we all know, are needed to
be deducted with the cost of sales or expenses incurred by the business before taking
necessary deduction such as tax. If the basis of business tax is on the gross sales and
not on the net taxable income of the business, then the net income would probably result
to a deficit, because we still have to consider the expenses incurred by the business. It
would be unfair for the part of the business-owners as the tax deduction will be much
higher if it will be imposed on the gross sales rather than on the net taxable income. I
would agree if the business tax will be subjected to the net taxable income of the business
with the exemptions and considerations to those entities who are not capable to pay
taxes
The Equality or theoretical justice of the principle of taxation says that “taxes must be
based on the taxpayer’s ability to pay”. If the business-owners are struggling to maintain
a positive mark on net income, due to the scheme of imposing business tax on the gross
sales, then it will surely
Second. Correlates with the theory of the taxation which is the
From the definition that is provided in the textbook, double taxation is used as means to
impose taxes on business and individuals in addition to a tax on income. The double
taxation refers to the case of paying taxes twice which means more expenses and less
money in your pockets. For example, if a company earns $200 million, it will be taxed
first by the state of origin and then by other states where it operates. This means that
instead of having $200 million in profit, it will have less than $200 million after paying
these taxes. In this way, not only are you footing some tax bills but also you are losing
some profit for your company's activities.
Principle of taxation:
Equality or theoretical justice – taxes must be based on the taxpayer’s ability to pay