In most of the tax systems, federal, provincial and municipal governments levy taxes on income from wages and taxes on the consumption of goods and services, real estate and goods that cross borders. If you are an employee, there is a withholding tax on your salary income. You also pay a sales tax on the items or services you buy. Sales taxes are automatically added to your bill when you buy something and your employer deducts your tax directly from your pay. At the end of the year, you file a tax return to make sure you have paid the right amount of tax. If you have paid too little, you owe money but if you have paid too much money, you will receive a refund.
Just like employees, business owners, retirees and investors must file a tax return to account for their business, pension and investment income. Businesses that collect the goods and services tax or pay the payroll tax, pay the money back to the tax department and fill out forms to ensure that they pay the correct amounts. The tax department uses the forms submitted by businesses and tax returns to ensure that the correct tax amounts have been collected. They also conduct audits of businesses and taxpayers to ensure that no tax liability is missed.
Tax to fund government operations
Government operating costs consume just under a third of tax revenue. For example, mostly the equivalent of eight cents for every dollar is spent on defense while the amount for firefighters, police and border security and public safety programs is four cents per dollar. Even the tax department’s operating costs are three cents per dollar. Other government operating costs include environmental programs, public works, veterans, food inspection, national parks, and other government programs and projects. Even almost half of the tax and taxes are reinvested in services to the population. These expenditures fund social programs for children and seniors, health care, education and international assistance. And if you forget to file your taxes you can do the needful process with voluntary disclosure Toronto to ensure your tax payment.
Conclusion: Government and tax
The government uses tax money to fund employment insurance and child social programs such as the child care benefit, the child tax benefit and the GST credits for families with children. Some of the tax revenue is also for farmers, aboriginals and first nations, as well as for research. International assistance equals two cents for every dollar of tax invested. A portion of the tax collected finances the debt. If you hold federal bonds or treasury bills you are one of the government’s creditors. When you cash in those securities, the government uses tax revenues to pay you.