Saturday, February 8, 2020

Explain with recent examples from recent years in the UK, the main Essay

Explain with recent examples from recent years in the UK, the main reasons why a government taxes it's citizens - Essay Example It is also tasked with creating job opportunities for both the learned and the informal sector. In order to achieve these, the government levies taxes on its citizens to help perform its duties effectively and efficiently. The essay shall explore the various reasons as to why governments levy taxes and give examples. Taxes are compulsory and anyone caught for not complying is charged with tax evasion. There are several reasons as to why governments levy taxes. They include catering for the government expenditure. The mandate of the Government is to take care of all its citizens. This is because they have to create facilities, pay workers wages and also provide necessities for each citizen. It incurs many expenses in carrying out its daily activities since there are many projects the government undertakes such as international trade. For example, when the United Kingdom hosted the Olympic Games a few years ago, the government spent millions of pounds in building new stadiums and refurbishing the older ones. They also spent money on new facilities and infrastructure. Another reason for taxation is to bolster the economy to prevent it from market failure and shield its citizens from externalities. The recent Global financial crisis hit most countries all over the world. The United Kingdom and the other countries within the European Union were also affected. Many people lost their jobs, homes, businesses and their sources of livelihood. The financial crisis was a revelation, in that it made the government realize that the economy was vulnerable and took measures to ensure that it does not happen again. Externalities are the third party effects that arise from the production and consumption of goods and services whose consumption offers no form of compensation. They affect people indirectly since they occur outside the economy. Externalities affect individuals who are not directly

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