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Sales Tax |
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Sales Tax is nothing but a percentage of money charged by most governments on goods that come under the umbrella of consumer products. This tax is set a s a certain sum of money and is charged on the basis of a particular percentage. Although all kinds of Sales Tax are charged on the goods, it is the buyer who usually has to pay up the tax and not the person who sells it. For most sellers and business men are clever enough to levy it upon the buyers. In fact in many countries, business men often avoid Sales Tax by charging a less amount of sum on the purchase of certain goods.
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Apparently this seems to a be a smart way to save money, but in the long run it harms the general development of the country as a whole. For it is through these Sales Tax that the government earns its revenue. This revenue thus received is further utilized to improve the infrastructure and economy of the country. Avoiding Sales Tax is considered as a crime and is a punishable offense in most democracies in the world.
During every annual budget the finance ministry levies Sales Tax on all purchasable goods. Beginning from the smallest pin in the market to the largest tractor , everything that can be legally bought and sold is subjected to an amount of Sales Tax. Depending on the GDP, government policies and the condition of the economy, the percentage of Sales Tax varies from year to year. But it is almost obvious that the larger the amount of money spent on buying the product, the higher is the percentage of Sales Tax levied on the purchase. From a buyer's perspective, all this may appear to be quite complicated. The easiest way to ensure that you are paying the due Sales Tax for a product is by ensuring that you ask for a bill after every purchase. Moreover one must always pay the printed price on the product. You must also see to it that the price tag bears the mark “inclusive of all taxes”. This mark is the biggest proof that the product is covered by Sales Tax.
However, most governments deliberately exempt certain products like live saving medicines, essential ingredients and certain services from Sales Tax. That is these ingredients or services may be brought and sold without paying any extra charge to the government. It has usually been the trend to levy a higher percentage of Sales Tax on such items like tobacco, alcohol, gold, expensive jewelry, boutique products and processed food. Staple food and baby products along with health care services and educational services up to a certain level are on the other hand beyond the purview of Sales Tax. Most of the developing countries review the Sales Tax table quite frequently. Frequent revision in the structure of Sales Tax and a keen survey on the general practice of buying and selling around the country allows the government to have a fair idea about the progress of the economy. Moreover, it can also reform the infrastructure of the land on the basis of its fiscal income, received from Sales Tax. | | | |
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