Guidelines about Tax Shark
A neutral tax system that does not influence the kinds of economic activities that take place is favoured by some economists. Others favour the use of taxes and tax breaks to guide economic activity in ways they favour, such as reducing pollution and increasing the attractiveness of employing individuals rather than capital. Tax Shark is an excellent resource for this. Some economists argue that the tax system should be characterised by both horizontal equity and vertical equity, because it is fair and because it may be more difficult to justify tax evasion or avoidance when the tax system is fair.Likewise, if an estate is worth LKR 5,000,000 and the executor files a false tax return, it is only worth LKR 100,000 to improperly omit property and claim the estate, thus owing much less in taxes. The evasion of taxes has an effect on our tax system. It causes the community to lose significant revenue that could be used to finance improvements in health, education, and other government programmes. Tax evasion also makes it possible for some companies to gain an unfair advantage in a competitive market and for some people to fail to fulfil their tax obligations. As a consequence, the tax burden not paid by those who choose to evade taxes falls on other taxpayers’ laws. The following are examples of tax evasion: ï? ~ Failure to declare appraisable revenue ï? ~ Claiming deductions for expenses which have not been incurred or are not legally deductible? ~ Claiming input credits for goods which are not subject to Value Added Tax (VAT) ï? ~ Failure to pay the PAYE (pay as you earn a form of tax holding) instalments that were deducted from a payment, such as tax taken from the wages of a worker ï? ~ In an attempt to prevent payment, failure to lodge tax returns. Some signs that a person or business may be evading tax are the following: ï? ~ Not being registered for VAT despite the ï threshold being clearly exceeded? ~ Not charging VAT at the appropriate rate