Taxes are required contributions that businesses and individuals with income must pay to the Bureau of Internal Revenue (BIR). The BIR serves as the Philippine Tax Authority, which collects applicable taxes at least once a year. Unfortunately, paying taxes is not always a pleasant experience for everyone. There has been a long-standing stigma surrounding taxes, with a popular quote that even says no one can escape death and taxes.
In reality, although taxes are supposed to provide citizens with a multitude of benefits, most income earners still loathe paying their tax dues to the BIR. And that’s understandable because the amount is still a considerable expense and does take a portion of one’s income or profit. While it may seem like a hassle or a burden, taxes do, actually, serve an important purpose.
According to tax services in Manila, when taxes are used for the right purposes by the right hands, it is slated to improve the quality of lives of the Filipino people. So, why are taxes important? Why are you socially obligated to do so? Do they matter? What happens if you shirk this responsibility? Read on to find the answer to these questions.
Why are taxes important?
The purpose of taxes is for government to use such by spurring economic growth through investment in different industries and projects which generate a source of sustainable funding for social programs and public investments. You can think of your taxes as a capital fund that the government uses to generate revenue and improve society.
For example, tax and audit services in the Philippines share that programs that taxes are invested into include healthcare benefits, retirement benefits, free public schooling, public transportation systems, road building, and the building of key facilities, and ports. These infrastructure and programs help generate economic growth by providing access to opportunity for all.
Why is it a social obligation to remit taxes?
As mentioned, the government uses collected taxes as a fund by which they are able to finance projects for the well-being of all Filipinos. Social welfare programs, like the construction of public schools, free healthcare facilities, and the likes, are in operation because of taxes.
Moreover, tax and accounting services in the Philippines point out that taxes are placed on road and transport construction, which provide mobility to individuals, allowing them to go from place to place to sell their wares and labor. Taxes also fund state tertiary education, which produces graduates who are productive in society and the workplace. All in all, taxes seek to improve the lives of a constituency through investment into projects and infrastructure that will benefit it.
What do all these have to do with you?
You benefit from paying taxes too! If you are a business owner, you would know that it is ideal to have a business along a road, where there is heavy traffic. Without roads built from taxes, you would have a hard time running your business as both suppliers and customers will have difficulty reaching you. Additionally, because of mobility given by public transport, more potential clients are able to reach your company, in comparison to if no transport existed, and your clientele would be limited to only those nearby.
Moreover, you would tend to hire trained professionals with experience in the field usually acquired through education, and taxes fund state education for talented individuals who are stifled by private tuition. Essentially, businesses and individuals benefit from the economic growth impacts of well-spent taxes. Besides, all of these expenses will be properly accounted for.
So why is it important for you to pay your taxes?
As mentioned, when utilized effectively, taxes are a great way to contribute to your community. You may also think of it as an investment in the betterment of society, which includes you, rather than a cost. Even businesses and individuals have something to gain from the taxes they pay. That said, apart from the social contribution, it is also important to pay your taxes as it is a legal obligation.
For registered business entities and individuals, there are no buts or ifs. Failure to pay taxes can result in hefty fines and penalties, which may be even more costly than paying the tax expense out front. After all, since taxes are a social responsibility, shirking such would be a societal disservice, and would warrant the necessary penalty.
Remember, do not allow the stigma surrounding taxes to impact the way you run your business. At the end of the day, you should not feel bad for making contributions to better economic growth in the country, as such would also positively impact you. If you need assistance with tax compliance, don’t hesitate to call our accounting services in Pasig. Our team is ready to assist you whenever you need a helping hand.
