Taxation

Taxation

Taxation

Record-Keeping and Filing Obligations

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Record-keeping and filing obligations are essential components of financial compliance for businesses and individuals. Maintaining accurate and timely records ensures transparency, supports tax reporting, and aids in financial decision-making. Failure to comply can result in penalties, audit issues, or legal consequences. These obligations apply throughout the business lifecycle—including commencement, operation, and cessation. 1. Importance of Record-Keeping Legal Requirement: Most tax laws mandate that businesses retain specific financial records for a defined period.… Read more
Taxation

Cessation of Business

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The cessation of business refers to the formal termination of all trading activities by a sole trader, partnership, or company. It marks the end of a business’s operational life and has significant implications for taxation, accounting, and compliance. Properly identifying the date of cessation ensures that final tax obligations are fulfilled and any reliefs or liabilities are accurately calculated. 1. Definition of Cessation Trading Ends: Cessation occurs when a business permanently stops its trading operations with no intention to continue.… Read more
Taxation

Commencement of Business

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The commencement of business refers to the specific point at which a person or entity begins trading with the intention of making a profit. It marks the official start of business activities and has important implications for taxation, accounting, and legal compliance. Recognising the exact commencement date is critical, as it determines the beginning of the business’s tax obligations, eligibility for deductions, and financial reporting requirements. 1. Definition of Commencement Trading Start: Commencement occurs when the business begins active trading—not merely preparing or setting up.… Read more
Taxation

Commencement and Cessation of a Business: Tax Implications

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Commencement and cessation refer to the start and end of a business’s trading activities. These events are critical for tax purposes, as they determine how and when income is assessed, how losses are treated, and what tax obligations must be fulfilled. Understanding the rules that apply at the beginning and end of a trade helps ensure compliance with tax laws and accurate determination of taxable income. 1. Commencement of Business A.… Read more
Taxation

Recognising the Basis of Assessment

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In taxation, the basis of assessment refers to the rules and timing by which income or profits are allocated to specific tax years. Recognising the correct basis of assessment is essential to determine when income becomes taxable and under which period it falls. This ensures accurate tax reporting, compliance with legislation, and minimisation of disputes between taxpayers and tax authorities. 1. Importance of the Basis of Assessment Accurate Tax Liability: Ensures income is taxed in the correct period, avoiding overpayment or underpayment of tax.… Read more
Taxation

Reassessing the Laffer Curve: Theoretical Foundations, Empirical Evidence, and Fiscal Policy Implications

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The Laffer Curve has long been a central concept in public finance and taxation theory, proposing a non-linear relationship between tax rates and government revenue. Popularized by economist Arthur Laffer in the 1970s, it asserts that there exists an optimal tax rate that maximizes revenue, beyond which higher rates lead to declining collections due to disincentives to earn, invest, or comply. Despite its intuitive appeal, the Laffer Curve remains a topic of considerable debate, especially in the context of real-world fiscal policy.… Read more
Economics, Taxation

The Gig Economy and Taxation: Challenges in Compliance, Policy, and Equity

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The rise of the gig economy—characterized by short-term, flexible, and platform-mediated work—has transformed labor markets worldwide. From ride-sharing to freelance platforms, millions of workers now operate outside traditional employment structures. While this model offers flexibility and income opportunities, it presents significant challenges for tax authorities, including compliance enforcement, revenue collection, and policy design. This article explores the implications of the gig economy for tax systems, drawing on empirical data, regulatory responses, and policy innovations across jurisdictions.… Read more
Economics, Taxation

Tax Incentives and Economic Development: A Critical Review of Effectiveness and Efficiency

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Governments worldwide use tax incentives—such as tax holidays, investment credits, and special economic zones (SEZs)—to attract investment, foster innovation, and stimulate economic development. While such incentives are popular tools in fiscal policy, their effectiveness remains widely debated among economists and policymakers. This article critically examines the theoretical rationale, empirical evidence, and case studies on tax incentives, focusing on their economic impact, fiscal cost, and administrative challenges. Theoretical Foundations of Tax Incentives From a neoclassical perspective, investment decisions are driven by after-tax returns.… Read more
Economics, Taxation

Green Taxation and Environmental Economics: Evaluating Carbon Pricing Mechanisms in Global Policy

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In the context of escalating climate crises and international sustainability goals, green taxation has emerged as a pivotal tool in aligning economic incentives with environmental outcomes. Central to this development is carbon pricing—through carbon taxes or cap-and-trade systems—as a policy mechanism to internalize the negative externalities of greenhouse gas (GHG) emissions. This article critically examines the theoretical foundations, empirical effectiveness, and global variations in carbon pricing systems while highlighting recent case studies and policy outcomes.… Read more
Taxation

Common Errors in Determining Assessable Trading Income

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Accurately calculating assessable trading income is crucial for correct tax reporting and compliance. However, businesses often make errors that can lead to overstatement or understatement of taxable income. These mistakes can result in penalties, interest charges, or missed tax-saving opportunities. Understanding these common errors helps in avoiding them and ensuring accurate tax filings. 1. Failure to Add Back Disallowable Expenses Some expenses are not permitted for tax purposes even though they appear in the income statement.… Read more
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