The Comprehensive Tax System: How Does The Comprehensive Taxation Benefit Small Businesses?

KNIGHTDALE, N.C. - Oct. 5, 2023 - PRLog -- Introduction

A taxation system like GST allows MSMEs (Micro, Small, and Medium enterprises)  to conduct business due to its simplicity and reduces the tax burdens on business stakeholders. MSMEs experience a variety of issues, such as a lack of adequate and prompt banking finance, a lack of appropriate technology, ineffective promotion because of a lack of resources, and a shortage of trained labour. The government needs to take a variety of actions to increase this sector's involvement and importance to the country's economic growth.  In this blog post,  Michel Anthony Griffin from Knightdale will discuss the benefits, tax structures, Impacts of GST in MSMEs, and government initiatives related to GST to promote MSMEs.

How Does The Comprehensive Taxation Benefit Small Businesses?

The comprehensive tax system to decrease the cascade effect and reduce the tax burden across the nation. The imposition of the Goods and Service Tax (GST) on different levels depending on the locations and the supply chain for services and goods reduces the tax burdens. GST brought changes in small business enterprises thus, it plays a key role in transforming the business structure. It impacts the internal business procedures as well as the operation of business in the market. GST reduces compliance issues and promotes ease of doing business, The major benefits of GST are below:

Uniformity in tax structures: Irrespective of location, GST has brought neutral taxation to make doing business easier by reducing transaction costs.

To Improve the Competition: Dismantling the inter-state check-post is crucial to improve the competitiveness among the manufacturing sectors.

Boost exports: The combination of central and state taxes would reduce the cost of local manufactured goods and services.

Easy administration: GST replaces many central and state taxes, which it makes easier to administer direct and indirect taxes.

Revenue Generation: GST has boosted the revenue from the indirect tax which increases the number of taxpayers in the nation, it helps to increase revenue for the country.

There are different constituents of GST that aim at increasing competition in the export industry by protecting the domestic goods industry. There are different clauses for services and goods.

Conclusion

In summary, GST is a multi-stage consumption tax that applies to all domestic taxable delivery of goods and services, with the exception of those that are fundamental and necessary, and a more efficient taxation system. According to Michael Anthony Griffin, there are various difficulties associated with the effects of the introduction of the GST on  MSME businesses.