The following are some of the benefits of having a strong taxation system.
- It is compliant with the equality canon
This canon states that all taxes need to be implied based on equality. Paying the same amount of money in terms of taxes does not refer to equality. It means that tax should be proportionally to the size and kind of business you are running. When the taxation system is imposed specifically to different business categories the purpose of equality and justice is served.
- It is in accordance with the canon of certainty
A strong taxation system also ensures compliance with the canon of certainty. This canon states that the taxation amount needs to be definite and certain to the tax payer. Any ambiguity in terms of the tax amount one pays should not exist. This makes one to be aware of the expected tax before the day of payment arrives.
- It creates social awareness
The system will ensure that some sort of social awareness is created amongst different business owners. Businesses pay the government some part of their money and in return have some expectations from it. Having the idea that is your money which is being spent, one becomes more responsible and socially aware. It in returns contributes to lees damaging of public commodities, littering and crime.
- Creates a platforms for equal wealth distribution
Any government and economy raves about having an equal wealth distribution system. This is what a strong taxation system helps in achieving. Additionally, the social binding of people from different social classes is enhanced with this system.
- Anti-inflationary and elastic in nature
Strong taxation systems can be employed as an anti-inflationary measure. Whenever the inflation rate is decreased by the government, the taxation effects are well harmonized across the board. None of the taxed groups will complain of being unfairly taxed when such situations arise.
- Affects investments and savings
The levels of investment and savings can be affected by the taxation system. This in turn can affect the entire ratio of savings within the economy- by increasing or decreasing the rate of tax. Whenever taxes are decreased, people and businesses are able to save and thus invest.