Citizen Participation in State Development

Income Tax: Citizen Participation in State Development

Income tax is the amount that a citizen pays to the government as a certain portion of his income. Income tax is collected for state development, government activities, and ensuring various public benefits. Income tax is established as an important economic and social policy in the modern state system.

Origin and development of income tax

The concept of income tax has been prevalent in various societies since ancient times. However, the modern income tax began in 1800s Britain. The British government introduced income tax during the First World War to cover their war expenses. Gradually this system was adopted in other countries and it became a major source of state revenue.

Almost all countries of the world including Bangladesh have income tax system. In this system taxpayers pay tax at different rates based on their income. Income tax is payable above the prescribed income limit as per government law. However, low income individuals are exempted from tax.

Importance of Income Tax:

Income tax is a major source of government revenue. It is essential for the economic and social development of the state. The money paid by taxpayers is spent on various important sectors, such as:

1. Infrastructure development: Income tax money is spent on building and maintaining roads, bridges, schools, hospitals, and other critical infrastructure.

2. Expenditure on public services: Tax money is used to run health care, education system, social security schemes etc.

3. Military and Security Sector: Money earned through income tax is spent on the security and defense sector of the state.

4. Salaries of Government Servants: The salaries of government servants for running the good governance and administration of the state come from income tax.

Income Tax and Social Justice:

Income tax works as a progressive tax system. This means that the higher the income, the higher the tax rate. As a result, it is possible to reduce the disparity between rich and low income people. In addition, through income tax, the government can ensure social security measures such as old-age pensions, scholarships, and health care for the poor.

Challenges in income tax payment:

Although paying income tax is a civic duty, many people try to avoid paying tax. Tax evasion has emerged as a major problem in many countries. This results in depriving the state of desired revenue and hampering development projects. Therefore, it is essential to increase the awareness of taxpayers and simplify the tax system.

Conclusion:

Income tax serves as the basis of economic development of a state. It is essential for running essential activities and services of the state. Payment of income tax is an important duty of the citizen, which contributes to the overall development and prosperity of the country. Paying taxes is also a moral duty in addition to accepting government services. Therefore, taxpayers should pay taxes at the right time and in the right amount, so that the development activities of the state are more dynamic and effective.