What is the importance of tax payment in the business environment

Business Environment

 

What is the importance of tax payment in the business environment

 

Case Studies

CASE STUDY (20 Marks)

Measuring the Results of Donor Supported Tax Reform – The case of donorsupported tax reform in Nigeria (GEMS3) Taxation is an important exchange between government and private enterprise. It provides the means through which governments are able to fund their activities, while influencing the behavior of the private sector through the use of incentives and penalties. For many emerging enterprises, the fear of taxation keeps them informal and hidden from official observation. Tax is central to the business environment as well as to the political accountability mechanisms of the state. In the past, tax reform typically focused on the shortrun objectives concerned with adjusting tax rates and increasing revenue. However, from a business environment perspective, tax reform focuses on the longer term concerns affecting economic growth and investment. Donor and development agencies support tax reform for a variety of reasons. These include: Increasing the sources of taxation; Broadening the tax base to include micro and small enterprises; reducing the tax burden for individual taxpayers; and Strengthening political accountability processes. Thus, donor and development agencies work with governments to streamline their tax systems, lower the barriers for firms to participate, encourage foreign and domestic formal investment, widen the tax base, and set the conditions necessary to lower the per business burden. Writing for the World Bank Group, Bruhn (2011) describes the challenges of measuring the effects of tax reforms on economic outcomes. Overcoming these challenges “ involves extensive data requirements, non uniform reporting practices, identification problems, and a wide range of imperfect measures and methodologies”. She cites several studies that link tax reforms that focus on reducing corporate tax rates to increases in investment and formal firm creation. While less is known “about the effects of reducing compliance costs”, a few studies have begun to indicate evidence of a link between tax simplification and an increase if firm creation and sales. Donor and development agencies that support BER, focus on tax reforms to contribute to increased private investments and rates of formal firm establishment, along with increases in business turnover and employment levels. These enterprise level changes enhance the capacity of the private sector to contribute to economic growth and poverty reduction. 2.1. The case of donor supported tax reform in Nigeria (GEMS3) In Nigeria, the World Bank and the United Kingdom’s Department for International Development (UK Aid) fund the Growth Employment in States (GEMS) program. The Nigerian Federal Ministry for Trade and Investment is responsible for implementing the program, which began in 2011. This program aims to create jobs and increase nonoil growth in specific value chains. UK Aid has provided a grant of £90 million and the World Bank a concessionary loan of US$160 million. GEMS indicates it will achieve an overall internal rate of return of 48 percent. A key target is the creation of at least 100,000 jobs directly in the selected sectors. The program targets at least six economic sectors and aims to support small and medium sized  enterprises (SMEs). While GEMS has four broad program themes, the third of these, GEMS3, is entitled “Support Improved Business Environment”. This is a five year program, which is due to conclude in 2015. GEMS3 seeks to improve the environment for doing business in Nigeria, especially in land, taxation and investment, so that these markets will work better for the poor. The GEMS3 12 business model states that these improvements in doing business will ultimately lead to lasting improvements in economic opportunities for the poor, especially women. GEMS3 has an overarching framework (i.e., logical framework) that cuts across

Answer the following question.

Q1. What is the importance of tax payment in the business environment? Explain.

Q2. How the tax base is widened with the coordination of donor and development agencies.

 

CASE STUDY (20 Marks)

Strategy has been considered for quite a long time by business pioneers and by business scholars. However, there is no complete answer about what methodology truly is. One purpose behind this is individuals consider system in various ways. The methodology is a setup and development of accessible assets for an association towards meeting the necessities, prerequisites and desires of business sectors and partners. It is additionally a long run heading and extent of an association that decides the dreams and

Objectives. Procedure is about choices taken by top administration to achieve an organization’s security and maintainability. Additionally, it alludes to essential directional choices, that is, to purposes and missions. Technique comprises of the critical activities important to understand these bearings, and it is additionally the end that the organization needs to reach in the wake of selecting the correct bearings. In actuality, not all business choices are having a place the key circle; The key choices are those which accomplishing something an unexpected way; From contenders and that distinction make a maintainable point of preference. Indeed, the exercises that are utilized to build profitability are not key since they can be effectively imitated by others. Strategy is a system that gives direction to moves to be made and, in the meantime, is formed by the moves made, and it has nine conceivable main impetuses: Products offered, Market needs, Innovation, Production ability, Method of offer, Method of conveyance, Natural assets, Size/development and Return/benefit. The plan of action is another idea in administration writing and practice. It depicts the rationale by which an association makes, keeps up and passes on regard for its accomplices. This term is getting the chance to be logically used among scholastics and experts. Furthermore, it is an auxiliary format that delineates the association of a focal organization& exchanges with the majority of its outer constituents in element and item advertises. It has been conveyed to the bleeding edge of vital administration considering, and has transformed into a particularly key new probability figure through late quick propels data and correspondence advances particularly, Internet and broadband headways that have supported new sorts of advancement interceded between money related authorities. The investigation of plan of action is an imperative point for key administration research since it impacts firms; Possible results for quality creation and worth catch A recently engaged business display together with in front of timetable segment into a business a rea has a valuable result on execution. The complexity between plans of action and technique is that plans of action are a coordination system, planning the parts of a business, while the methodology sorts out the aggressive battle considered that this idea can outfit directors and specialists with critical ways to deal with develop their appreciation of business wonders by building nonexclusive classifications and the headway of immaculate sorts. In this way, it helps chiefs to catch, imagine, fathom, pass on and offer the business rationale. Each composed exertion in arranging and executing a specific plan of action joins the progressive, too as the departmental level, especially to those authoritative units that are most separating to a legitimate determination and mix of business parts whose relationship and reliance structures the degree whats more, profundity of the engaged ability of any venture. In this association, business displaying is a strategy as contradicted to a state, fantastically as a result of the required changes, transformational or esteem based, that shape the approach of managing it.

Answer the following question.

Q1. Explain the difference between strategy and methodology in detail.

Q2. Discuss the terms “plan of action” and “techniques”.

CASE STUDY (20 Marks)

The Working Time Directive adopted by the European Union’s (EU) Social Affairs Council in 1993 governs working time regulations in the EU member states. It set a maximum limit of 48 hours per working week. Following the adoption, Britain negotiated for an ‘optout’ provision that allowed individual employees to waive their rights to the 48 hour limit. But recently, many have started questioning the relevance and operational veracity of the optout.

Answer the following question.

Q1. Explain the views of the trade unions and the Confederation of British Industry on the optout.

 

CASE STUDY (20 Marks)

America has increased outsourcing exponentially over the last six months. The corporate top brass and experts however, have staunchly defended their decision to outsource, stating that the job shifting to developing nations with well qualified human resources is necessary for the American companies to retain their competitiveness. While the pain is real for the people who have been rendered jobless, some politicians have chosen the issue to play on the minds of the populace, accusing outsourcing as a potential source for recession and jobless growth.

Answer the following question.

Q1. Explain the relationship between comparative advantage and outsourcing

Q2. Analyze the advantages and disadvantages of outsourcing in the context of US

Q3. Debate whether outsourcing is the real cause of unemployment in US and whether adopting a protectionist approach will be beneficial for the economy or not.

Q4. Give an overview of the case.

What is the importance of tax payment in the business environment

 

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