There are consequences that a company will face when they do not file taxes or are dishonest. Find at least one case where a company did not file taxes or were dishonest. Summarize the case and discuss how the company’s indiscretions will impact business in the future.
TAX IS THE MAJOR SOURCE OF INCOME TO THE GOVERNMENT.TAX AMOUNTS ARE USED BY THE GOVERNMENT FOR THE WELFARE OF THE PEOPLE AND THE DEVELOPMENT OF THE COUNTRY .PEOPLE AND COMPANIES ALL AWARE OF THE INTENTION BEHIND THE TAXATION.BUT MENTALLY THEY ARE NOT READY TO PAY TAX .MAJORITY OF THE TAX ARE CONTRIBUTED BY CORPORATE SECTOR. SO DEFAULT MADE BY THE COMPANIES AFFECT THE REVENUE OF THE GOVERNMENT AS WELL AS THE ONGOING BUSINESS OF THE COMPANY.LETS DISCUSS THIS MATTER BROADLY
DISHONEST OR DEFAULT BY COMPANIES
MANAGEMENT OF THE COMPANY ALWAYS THINKING ABOUT TAX EVASION. CORPORATE TAX RATES ARE HIGH. SO INCREASING INCOME OF THE COMPANY MAY LEAD TO THE PAYMENT OF HIGH TAX. SO COMPANIES MANIPULATE THEIR FINANCIAL STATEMENT TO SHOW THEIR EARNINGS TO A BELOW LEVEL OR BELOW TAX MARGIN. ONE OF THE MAJOR MANIPULATION MADE BY THE COMPANY IS SHOWING HUGE AMOUNT AS RETAINED EARNINGS AND ALSO SHOW HIGH AMOUNT OF DEPRECIATION AND EXPENSES. POLITICAL HOLDINGS ARE USED BY THE COMPANY IN ORDER TO PROTECT THEM SELF FROM THESE KIND OF TAX EVASIONS.
CONSEQUENCES
HIDDEN PROFITS ARE IDENTIFIED BY THE TAX AUTHORITY IF THEY FEEL DOUBTS REGARDING THE OPERATION OF THE COMPANY. IF THE GOVERNMENT AUTHORITY FOUNDS THAT THE COMPANY TRIES TO MANIPULATE THEIR INCOME TO AVOID TAX BURDEN, PENALTY WILL BE CHARGED OR EVEN CANCEL THEIR LICENSE OF DOING BUSINESS. SO THE COMPANIES MAY COMPEL TO PAY TAX FOR THE ENTIRE PERIOD OF OPERATION IN LUMP SUM.APART FROM THIS THEY SHOULD PAY PENALTY
ANY NEGATIVE MARK AGAINST A COMPANY WILL AFFECT THE ENTIRE GOODWILL OF THE COMPANY. IT MAY LEAD TO SHAREHOLDERS DISSATISFACTION .ALSO BANKS AND OTHER FINANCIAL INSTITUTIONS MAY NOT PROVIDE LOANS AND ADVANCES IN CASE A MISREPRESENTATION HAS ARISEN AGAINST A COMPANY. IT MAY LEAD TO LACK OF FUND FOR OPERATION AND EVEN LEAD TO LOSS OF BUSINESS. HUGE TAX AND PENALTY WILL ALSO BECOME A BURDEN. FINALLY THE BUSINESS WILL COMES TO AN END AND THE MANAGEMENT BECOME DEBTORS.
DUE TO THIS REASON IT IS FAIR TO OBEY GOVERNMENT RULES ,UN HEALTHY ACTIVITIES ESPECIALLY IN TAX MATTERS SHOULD BE AVOIDED .THING IN MIND THAT COMPANY IS RESPONSIBLE NOT ONLY TO THE MANAGEMENT BUT THE ENTIRE SOCIETY AT LARGE
THANK YOU
There are consequences that a company will face when they do not file taxes or are...
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