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Give reasons why tax:G.D.P ratio is poor in developing countries

      

Give reasons why tax:G.D.P ratio is poor in developing countries.

  

Answers


Veronica
Reasons for poor tax G.D.P ratio in developing countries
1. low per capita income - that is, in most developing countries there are low average incomes because of competition for the job market.

2. Few number of people paying tax - in most cases, the poor people aren't in a position to pay tax while still those who are in a position to pay it fail to do it.

3.Loop - holes in double tax avoidance treaties - In most developing countries, those in power take advanvatage and use the government tax for personal expenses.

4 Flourishing informal businesses - An example of these flourishing businesses are the guest rooms whereby the government start funding the informal businesses sometimes neglecting the formal ones thus poor G.D.P ratio.

5.Unorganized government set-ups - Any government sector that is not organized is not able to direct the taxpayer's accordingly.

6.Tax exemption and subsidy policies - exemptions in the taxable income being much than the income also leads to poor tax G.D.P ratio.


Ronieh answered the question on August 10, 2018 at 15:47


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