To create a business-friendly environment in the country, the government must take strong measures to offer good tax incentives to the traders. It will accelerate the pace of business activities and boost the business community’s confidence. To increase tax collection, the government needs to promote a culture of voluntary tax compliance.
A strong taxation system will induce small and medium industries to make productivity-increasing investments, directly raising the GDP per capita. Proper tax enforcement will also raise revenues, which will likely indirectly increase GDP due to infrastructure investment.
Currently, there is a policy of excessive tax demands, unnecessary notices to taxpayers and recovery proceedings that failed to increase tax revenue. Coercive tax measures and the imposition of high tax rates give rise to tax evasion, discouraging the productivity of the business community.
The government needs to promote industrialisation to create new jobs for youth, improve exports and enhance tax collection. For this purpose, reducing customs duties and taxes on the import of industrial machinery and technology is needed. It will help industries upgrade and produce value-added products, which will trigger a significant increase in exports.
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