how to approach to taxation

 approach to taxation.

Approaching taxation requires a comprehensive understanding of the tax system, its purpose, and the various factors involved.

While there is no single \”best\” way to approach taxation that applies universally, here are some general guidelines that can help individuals and businesses navigate the tax landscape more effectively:

Understand the tax laws and regulations: Familiarize yourself with the tax laws applicable to your jurisdiction. Stay informed about updates and changes in tax legislation, as these can significantly impact your tax obligations.

Maintain accurate records: Keep detailed and organized records of your income, expenses, and transactions.

Good record-keeping ensures that you have the necessary documentation to support your tax returns and claim deductions or credits accurately.

Determine your tax obligations: Determine which taxes you are liable for based on your income sources, employment status, business activities, and other relevant factors.

This includes income taxes, payroll taxes, sales taxes, property taxes, and any other applicable taxes.

Seek professional advice: Consider consulting with a tax professional, such as a certified public accountant (CPA) or a tax attorney. They can provide expert guidance tailored to your specific circumstances, help you optimize your tax planning, and ensure compliance with the tax laws.

Plan ahead: Engage in proactive tax planning to minimize your tax liability legally. This may involve considering various strategies like utilizing tax deductions, credits, exemptions, and deferring or accelerating income or expenses when possible.

Monitor tax deadlines: Stay aware of important tax deadlines for filing returns, making payments, and submitting required documentation. Failure to meet these deadlines can result in penalties and interest charges.

Take advantage of tax incentives: Research and take advantage of any tax incentives or credits available to you. Governments often provide incentives to encourage specific behaviors or stimulate economic activity, such as energy-efficient home improvements or investments in certain industries.

Regularly review your tax situation: Regularly review your financial situation and tax obligations. Ensure that you are optimizing your tax strategy based on changing circumstances, such as a change in employment, investment income, or business activities.

Stay compliant: Ensure that you comply with all tax laws and regulations. Filing accurate and timely tax returns, paying taxes owed promptly, and providing complete and truthful information are essential for maintaining compliance.

Keep up with tax updates: Stay informed about changes in tax laws, regulations, and reporting requirements. This can help you adapt your tax strategy, take advantage of new opportunities, and avoid potential pitfalls.

HOW TO APPROACH TO TAXATION MATHEMATICALLY,

Certainty calculations are done in taxation and for a proper understanding of it, it is very important to take note of the following terms; how to approach to taxation mathematically

Tax base: The tax base refers to the item or the object which is taxed. This includes personal income, import and exports, company profits, properties and goods for sale.

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Tax rate: to approach to taxation, Tax rate refers to the percentage (or proportion) of tax base or tax object which is to be paid as tax, e.g. 10% of income.

And ad valorem tax, for instance, is expressed as a percentage. On the other hand, it could be a flat rate of tax, e.g. 100 per adult male.

           Tax rate has a formula;

           Tax rate= Tax Payment                       100

                              Tax base                             1

Disposable income: This is the type of income derived after tax has been deducted from gross income. In other words, disposable or net income is total income less tax.

        Disposable income = Income – Taxation Or tax base – tax paid

Worked Example of approach to taxation

economic tools for nation building

budgeting

factors affecting the expansion of industries

mineral resources and the mining industries

demand and supply

public enterprises

private enterprises

The table below shows the tax payments of three income earners in a year. Use the Information in the table to answer the questions that follows: 

  Income           Earners           Income            Base            Tax payments X(N)             Y(N)
          Mr. Okafor          Alhaji Tanko   Mr. Kolawole          10,000           15,000           30,0001,000               800 1,500            1,300 3,000            1,500

Determine the percentage rate of taxation paid by

Mr Okafor in columns X and Y

Kolawole in column X and Y

Alhaji Tanko in column Y

(b).       i. Identify the systems of taxation employed in columns X and Y

  ii.  Which of the income earners has the least burden under column Y?

  • i.    if the government increases its rate of taxation to 20% flat rate, how much revenue     will be generated from the payees?

ii.   At 20% flat rate of taxation, calculate the disposable income of Mr. Okafor, Alhaji Tanko and Mr. Kolawole.

Solution to approach to taxation

  1. Tax rate = Tax payment       x          100

       Tax base                        1

  1. For Mr. Okafor

=   1,000      x          100

10,000         1

= 10% for X

=   800         x          100

     1   

10,000

=   8% for Y

  1. For Mr. Kolawole

=            3,000   x    100

           30,000         1

=         10% for X

=         1,500    x     100

           30,000   1

=         5% for Y

           (b)(i) The systems of taxation employed in column X and Y are:

           Column X = Proportional systems of taxation

           Column Y = Regressive system of taxation

                       (ii)        The person with the last burden is M. Kolawole with 5% tax rate.

           (c) (i)  Mr. Okafor = 20   x 10,000   = N2,000.00

                                             100        1

           Alhaji Tanko = 20  x 15,000  = N3,000.00

                                  100       1

           Mr. Kolawole 20  x 30,000  = N6,000.00

                                  100       1

Total revenue = N2,000 + 63,000 + N6,000

= N11,000

OR

20% of total income

=20  x (N10,000 + N15,000 + N30,000)

   100                                      1

= Disposable Income = Income – Taxation or Tax base – Tax Paid

Mr. Okafor     = 10,000 – N2, 000 = N8, 000

Alhaji Tanko   = 15,000 – 3,000   = N12, 000

Mr. Kolawole  = 30,000 – 6,000   = N24,000 

WEED AND THEIR BOTANICAL NAMES
1. ENVIRONMENTAL FACTORS AFFECTING AGRICULTURAL PRODUCTION
2. DISEASES
3. 52. SOIL MICRO-ORGANISMS
4. ORGANIC MANURING
5. FARM YARD MANURE
6. HUMUS
7. COMPOST
8. CROP ROTATION
9. GRAZING AND OVER GRAZING
10. IRRIGATION AND DRAINAGE
11. IRRIGATION SYSTEMS
12. ORGANIC MANURING
13. FARM YARD MANURE
14. HUMUS
15. COMPOST
16. CROP ROTATION

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