Tax is a complicated aspect that includes various codes, directives, languages which are difficult to interpret. The tax conundrum existing in this present 21st century can be understood based on the functioning of the activities in the tax sector. The term ‘conundrum’ means a complicated confusing problem that is amusing at the same time. This concept has been a topic of discussion in these difficult times of the pandemic where the companies have come forward to explore ways to fix this problem of tax conundrum. Calculation of tax based on the changing circumstances is a difficult task that requires proper analysis and regulation to ensure the smooth functioning of the system.
The significance of tax is that it has an impact on all aspects and every person would have dealt with this mechanism in their life. Hence it is important to analyze the same to enhance the sector and reduce any kind of other complications which can come in its way. The tax conundrum can be resolved by being aware of the situation of the society and acting in ways to resolve the issues which come up concerning the same with the help of authorities and legal bodies and effective legal provisions. Such a country will create a better economy which will help in the development of the people of the country.
An Overview of the Tax Conundrum
While dealing with tax-related aspects, it is important to have the cooperation of many people as it is essential for maintaining various functions in the sector. The involvement of specialized people is a great requirement for tax management to resolve any kind of issues that may come up in the process. When the issue of tax liability arises for the clients, there need to be right people in all corners to address the complexities through the application of various opinions and interpretations. The tax liabilities of the people based on the income have to be recorded and dealt with very carefully to avoid the problems that can come out of the same. The planning and coordination play a significant role in enhancing the tax-related matters as it will create an atmosphere where the liabilities of the client and other problems concerning the sector can be analyzed and sorted based on the situations.
This kind of tax conundrum is seen in most of the aspects where it has to be addressed to create a foundation of agreement or cooperation to enhance the current situation. E-commerce is an example of this particular aspect where it is seen to be growing every day as more and more businesses are coming up creating more advancement in the sector. To make this business effective, it is important to understand the e-commerce tax conundrum to support the business and other related aspects. While analyzing the tax-related aspects across the globe, it can be seen that the laws and regulations cannot be helpful to go along with the changing economic conditions as it becomes difficult with time. To structure the tax framework, it is important to use creative tax structures by maintaining the functioning of the same.
Indian Corporate Tax
The corporate tax rates in India have always been high since the early times where it continues to remain within the range of 15% to 30%. The digital service tax is one of the major aspects dealt with under the concept of corporate tax where the companies have raised their concerns on the same over the years. This demand for a proposal that would benefit the functioning of the sector in India where the opportunities for tax arbitrage (a practice of profiting from differences that arise from the various types of taxations) can be reduced and it will further invite foreign companies to come forward in the same. The new manufacturing companies are focused on this aspect where they are more likely to be taxed when compared with the other companies. This gap can be narrowed only by implementing an effective proposal or measure where the sectors can function properly without creating any other problems.
What can be done?
The issue of tax conundrum is complicated to resolve due to the involvement of various aspects in the same. There have been many suggestions and opinions on this topic where the countries across the globe have raised their concern for the increased tax on essential aspects. In these changing times, society has undergone various changes where it has become difficult to maintain a balance in certain aspects. The digital services, online gaming platforms, and other related aspects have been undergoing various changes concerning taxation and such problems can be resolved by regulating the functioning of such aspects through laws and rules. In India, the online gaming sector has been going through a rough phase where the regressive taxation of the particular sector has led to a situation where the business has become unstable and it has resulted in an unbalanced atmosphere.
The Goods and Services Tax (GST) law has a great significance in regulating this situation as it is important to sustain the industry by doing the same. Other sectors like the online gaming platforms are also going through this situation where the tax demands have become a pain for the people as it is making their lives complicated. The countries are facing different issues in tax conundrum where the solution also differs based on the changing jurisdictions. In North Carolina, there were problems concerning non-profit property tax issues where the role of government in maintaining a proper system was discussed. Other countries like Canada have also undergone such kinds of problems concerning tax conundrum which signifies the need to have a well-functioning taxation system and laws to ensure the proper functioning of the same.
Tax Evasion and Avoidance
The issues concerning tax include evasion and its avoidance where many companies have started to avoid tax payment to increase their profit. Many companies have also come forward to do the same and are promoting other individuals to carry on the same functions. This becomes a problem when the big companies and rich people start to focus only on the economic gain by paying less tax and creating a problem in the overall functioning of the country. This is a serious issue as such people or organizations are expected to pay based on their living situations and the avoidance of the same will have an impact on the whole economy of the country. It can be seen that the big companies increase their investments whereas they reduce their tax payment and create a situation, which is difficult to maintain a proper functioning system.
In these difficult times especially, it is important to have an effective system to maintain the economy of the country. The present taxation system is exploited in many ways where the practices involved in tax dodging are happening at a greater rate even though it is illegal. Such actions have to be analyzed and strict actions have to be taken to ensure smooth functioning of the system without involving any other aspect. The problem that arises in such aspects is that the ordinary people and the poor countries will have to pay taxes which will make their lives difficult and they will be left with no other choice. Such problems have to be addressed before the authorities and remedies should be taken for the same to ensure such actions will not be repeated in the future. The regulatory bodies have to come forward to resolve such problems and to address the concerns of the people who need the attention.
Conclusion
The authorities often face the problem of tax conundrum where they have to deal with the nature of each tax and analyze the same to have a properly balanced system without creating any problems. The problems which come up differ based on the jurisdiction and components involved in it and it is important to have a regulatory body or authority to maintain a balance between these different aspects to enhance and help in the growth and development of the country.
The taxation system has a great role in the economic growth of the country and it is essential for the smooth functioning of various aspects of the country. It is an aspect that is related to various other related matters which are as significant as the tax system which makes it more significant. In this present society, the issues related to tax are on a rise and they can be resolved by the active participation of the people and the authorities in a proper manner. The problems concerning tax have to be resolved without delay to enhance the economy of the country and to ensure the proper functioning of the sectors. It is important to have responsible regulatory bodies to act when required without a second thought, for a better future with a better economy in all the countries across the globe.
Editor’s Note
The issue of tax conundrum has been in the limelight for quite some time now. This article explains the meaning of the tax conundrum and its position in the Indian economy, particularly in reference to India’s Corporate Tax. The author has also addressed the issue of evasion and avoidance and has also thrown some light as to what can be done regarding the issue of tax conundrum, across the globe. Lastly, the author has concluded by saying that the issue of tax conundrum has to be resolved at the earliest by way of maximum public participation and an effective regulatory framework.