With the income tax deadline looming, you may be wondering where all your tax money is going and how they are utilised in South Africa.
Taxes are levied and used to finance government activities. In economics, taxes fall on whomever pays the burden of the tax, whether this is the entity being taxed, such as a business, or the end consumers of the business’ goods.
The taxes are also used to help fund public works and services—and to build and maintain the infrastructures used in a country. The tax collected is used for the betterment of the economy and all living in it.
In South Africa and many other countries in the world, taxes are applied to some form of money received by a taxpayer. The funds could be income earned from salary, capital gains from investment appreciation, dividends received as additional income, payment made for goods and services, etc.
Practical ways the government uses your tax money:
- Pay debt – With all that has been happening around us, the government has had to apply for relief funds from other countries and facilities such as the World Bank. Taxes levied on citizens also contributes to paying off the national debts.
- General public services
- Social protection
- Public order and safety
- Economic affairs
- Housing and community amenities
- Recreation, culture and religion
- Environmental protection
Although there has been a lot of controversy around the corruption in our government and how the tax payer’s money is being misused, let us not forget the good the comes out of paying taxes. Our roads are being maintained, public servants at lower municipalities are getting paid, public schools are also benefiting from taxes.
Your contribution does go a long way. Always pay your taxes on time.
Contact me directly on email@example.com for more on how to prepare for tax season.