Date Posted: 12/11/2012 9:50:27 AM
Posted By: Macawear88 Membership Level: Silver Total Points: 163
Tax is an important source of revenue for all countries. Taxation is one of the reason why businesses and even individuals are supposed to register themselves. In Kenya, registration for tax purposes is done through the Personal Identification Number (PIN). In Kenya, taxation is only to be done on legal services and businesses. There is no taxation of illegal and immoral services. The main reason and logic behind this is the fact that public policy is against taxing illegal services. The Kenyan courts interpreted taxing illegal costs as condoning illegal activities. In other countries, illegal activities are taxed just like legal activities. The main reason behind such taxation is premised upon the fact that tax should only be concerned with the amount being taxed and not where the income was gotten from. The countries state that their tax policies are not promoting the illegal activities but rather ensuring maximum revenue collection.There is need to separate legal activities from immoral activities. Legal activities are those which have been prohibited by law. They are branded as unlawful through proper legislation and enactment of law. Immoral activities are those which disturb a society's norm. They may be illegal or not. For instance fornication may be immoral but not necessarily illegal. In countries such as Thailand prostitution is legal despite the fact that it is immoral.Taxation under Kenyan jurisdiction is set to be within the premises of public policy. Public policy means what is not contrary to the Constitution, any other law nor inimical to the interests of Kenyans. It is for this reason why prostitution and other illegal activities are not taxed.
Next: Arguments put forward in support of free trade. Previous: Poultry farming as a business in Kenya
Get premium membership