Recently, a well deserved and long awaited trip to Dominos was embarked upon. Armed with information on the various types of pizza served, an empty, rumbling stomach and the exact amount of money displayed in the flyer (you know being frugal and all), I was ready to satisfy my pizza cravings. Boldly walking to the counter to place my order without thinking twice about what type of pizza I wanted and not wanting to waste the time of those waiting, it came as a surprise when the bill came and I saw tax being placed on my pizza.
Errmmm, excuse me attendant but there seems to be a mistake here.
Well, it turned out there was no mistake as I read up on the various types of taxes imposed which led me to this post this morning. A tax is a financial charge imposed upon a taxpayer (an individual or a corporate body) by the state to fund various public expenses. There are various types of taxes paid by taxpayers and a default or evasion on the part of the taxpayer to pay his taxes is usually punishable by law. Tax rates and tax laws vary according to country all over the world countries as some countries impose almost no taxation or a very low tax rate while other countries impose a high tax rate. There are different types of taxes imposed by the Federal Inland Revenue Service which is the establishment charged with the collection of tax administered in Nigeria, and these taxes are:
- Companies Income Tax
- Petroleum Profit Tax
- Value Added Tax
- Personal Income Tax
- Withholding Tax
- Educational Tax
- Stamp Duties
- Capital Gains Tax
- And lastly, National Information Technology Development Fund Levy.
They seem so much right?
Well, they are but today’s post is just an introduction to tax and we’ll touch on the types of taxes next week. The main purpose of taxes is to raise revenue for the government for various functions such as road constructions and repairs, economic infrastructural development, preservation of the culture and arts, carrying out scientific research, collation of citizen data and many more. When the expenditure of the government exceeds the tax revenue generated, the government is in debt. Tax generated can be used to pay off past debts while funding welfare and public services. Having a crash course on the purpose of the tax charged with my box of pizza made me understand how important that amount of money taken is, which didn’t hurt so much after my crash course was over.
I’ll have a second box of pizza later and will be sure to smile when taxed for it. Have a lovely Monday and Month ahead.