Income

Why tax education is important for revenue and revenue management

The apathy surrounding the subject of taxation, fueled by increasing levels of mistrust and lack of trust in leadership among citizens, hampers the effective generation of taxes, thereby limiting financial contributions to collective development. Although some of the distrust surrounding taxation is justified, it is relevant for citizens to know how public revenues are generated and used to develop the various sectors of governance.

Financial literacy is crucial and important because it allows the average earner to understand how to best manage their income. Many employees generate their salaries without knowing enough about how they actually spend their income on their expenses. Knowledge of how taxation works is a path to positive financial literacy, to creating a balanced link between income and the resulting expenses.

Tax education is also important for fueling civic action to promote policies that would promote progressive tax schemes and regimes. Adequate education on revenue, tax and financial regimes would lead to an increase in the promulgation of more laws, legislations and policies that can contribute to the development of taxation. A nation with a significant number of individuals versed in tax education is poised to adapt its tax policies to global standard best practices, thereby increasing their chances of economic stability and development, bound to have a better chance than a country with a small number of tax-savvy individuals.

The promotion of tax education also contributes to tax advocacy and activism, thus promoting knowledge of taxation at the grassroots level. This is evident in the impacts of tax and tax organizations willing to spread the gospels of taxation. The emergence of tax debates, marches, capacity building sessions and seminars promoted by tax clubs and organizations in higher education institutions bear witness to this. Many enthusiasts and aspiring professionals have benefited from these opportunities offered by these resulting effects of tax education, which has greatly contributed to the construction of their career path and their skills.

Accountability is necessary for governance and tax education is an effective way to ensure that public finances are properly committed and not laundered. Knowledge of how essential taxes such as personal income tax, education tax, corporate income tax, capital gains tax, value added tax work , withholding tax and other taxes would ensure that citizens are aware of how these taxes are spent and how they are spent on expenditures and budget allocations. Tax education would also go a long way to ensuring that corrupt public officials are brought to justice in connection with tax and financial laundering, with a view to promoting transparency in governance and public administration.

Tax education could be a necessary panacea to boost decentralized sectors and entrepreneurship. Tax experts are bound to be knowledgeable about how taxes work and how they could optimize their organizations to take full advantage of tax benefits. Startups and unicorns could also emerge from these innovations, which would greatly contribute to job creation, business optimization and economic development.

However, tax education is fraught with pitfalls and problems. In research conducted by the International Center for Tax and Development (ICTD), low budget, tax apathy, low participation and disinterest are identified as the main challenges that hinder tax education, especially in developing countries. third world economies. However, if tax education is targeted and streamlined at all levels and across all councils, various sectors will benefit from effectively disseminating the workings of taxation to citizens. Tax education is a pathway to effective revenue and revenue management, increasing the chances of economic and financial innovation and development.

Adedimeji Quayyim Abdul-Hafeez can be contacted via [email protected]