MICRO BUSINESSES – A FISCAL AND ACCOUNTING „TRAP†FOR THE TAX PAYER
Journal Title: European Journal of Business and Social Sciences - Year 2014, Vol 3, Issue 7
Abstract
The micro business is an economic category which constitutes a common practice in Romania. The majority among entities are categorized upon their foundation as micro businesses by the Registrar of Companies/Trade Registry. This obligation essentially works against new companies, as they will pay income tax even if they report financial and fiscal loss. This trap is introduced by law out of a wish to collect taxes from start-up companies and discourage young entrepreneurs. Our suggestion is that the law-makers should at least allow companies to choose their tax system, as these constraints lead to sales unaccompanied by invoices and in this manner, the national budget is affected. For instance, many entities registered as small companies do not issue receipts, and the money cashed in are avoiding tax. At a national level, this type of tax avoidance is blossoming and the lawmakers should be more flexible with the options for taxation. As such, there is no difference between the communist system and the so-called capitalist system. When comparing the taxation method for the same company (corporate tax and income tax) the advantage of income tax is clearly visible. At the level of the tax-payer, the 3% rate leads to paying a higher income tax than a corporate tax would be. Yes, the tax-payer primarily compares the two rates: 3% and 16%. And in its essence the 3% rate will determine a much higher resource output.
Authors and Affiliations
Deaconu Sorin-Constantin| Department of Economics and Business Administration University ”1 Decembrie 1918” Alba Iulia Romania
Keywords
Related Articles
- EP ID EP10490
- DOI -
- Views 267
- Downloads 16
THE EFFECTS OF EMPLOYEE SKILL SET IN INTEGRATED FINANCIAL MANAGEMENT INFORMATION SYSTEM ON SERVICE DELIVERY IN THE MINISTRY OF INTERIOR AND COORDINATION OF NATIONAL GOVERNMENT IN KENYA
The introduction of the Integrated Financial Management system, Electronic Funds Transfer, the Pension system and the Public debt management systems among others, have been premised on the realization that government...
A STRING SEARCH MARKETING APPLICATION USING MIT APP INVENTOR VISUAL PROGRAMMING
Using the App Inventor software, this paper extends a previous paper that demonstrated the use of programing software that provides the student programmer visual cues to construct the code for a student programming a...
SOCIO-ECONOMIC IMPACTS OF MICROCREDIT ON RURAL AREAS IN BANGLADESH: AN ECONOMETRIC ANALYSIS
Bangladesh is a pioneer and home of conceptualizing microcredit program. It has undertaken a number of such programs to reduce poverty and bring about socio-economic changes in the rural community. Bangladesh is one of...
ENTERPRISE RISK MANAGEMENT PRACTICES AND FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN RWANDA
Banking sector in Rwanda is exposed to various risks which originate from both the internal and external environment. Financial risk threatens Banks financial viability and long-term sustainability. Market risk, credit...
THE EFFICIENCY OF CAPITAL ACCOUNT LIBERALIZATION IN INCREASING THE LEVEL OF FOREIGN DIRECT INVESTMENT
The mechanisms that link one economy to the others are diverse. This diversity comes from the fatality and the necessity for the economies to be interacted according to the trade and investment principles. In order to...