Fiscal institute under the state tax committee “Tax and taxation” faculty Group – 01-22 english

FISCAL INSTITUTE UNDER THE STATE TAX COMMITTEE
“Tax and taxation” faculty
Group – 01-22
ENGLISH
“Independent work”
Nabiyev Sherzod


TASHKENT 2023
Case study
Strengthened tax transparency
Tax avoidance is an ethical issue in most countries that negatively effects on strengthened tax transparency. Moral practices should be taken to stabilize tax transparency. Imagine that you are an expert tax staff and you are observing immoral practices of tax payers for avoiding to pay taxes. Is tax avoidance unethical practice in your countries? What are the reasons? What kinds of incentives can you suggest to educate the tax payers not to take unethical actions against tax collectors when they are taxed?


Stage 1
According to 2022 data, taxes will make up more than 40 percent of the republic's gross domestic product. This is a poor indicator, primarily due to problems in legislation and systems.
What does it mean to avoid taxes and seek hidden income?
The underground economy is based on the illegal production of goods and services by economic entities and illegal income by avoiding taxes. Its occurrence is caused by the state's excessive intervention in the economy, legal problems, high tax burden, and poor business environment.
Due to the fact that many businessmen earn hidden (illegal) income, the part of the collected funds that is paid for taxes also ends up in the pockets of dishonest persons who avoid taxes.
It is the duty of every citizen to work according to the law and to pay taxes according to their income, but why do most people not feel this responsibility? Why don't they realize that the taxes they pay are important for the country's economy?
The main factor in this is probably the problems in the tax system. Why do people avoid paying taxes? Because the tax burden is high, the taxation system is imperfect, and the population's trust in state bodies is low. Some even fear that "if I don't disclose the amount of my money, they might try to take it."
The second factor is the tendency of people to save money, the desire to live well no matter what, and the strong desire to earn a lot of income with low expenses and little work. Also, social stratification, fierce competition, and high inflation serve to avoid taxes and, as a result, the underground economy is established.
Some sectors with a large share of the hidden economy
We know that the largest funds in the country circulate in the trade and service sectors. In turn, hidden incomes are formed in these areas. For example, in small shops that serve a large part of the population, it often happens that a purchase receipt is not issued or the customer himself does not request it. According to experts, this seemingly simple situation actually leads to the development of a hidden economy and the formation of an unhealthy competitive environment among business entities.


Stage 2
Reason 1. If a check is required by every consumer, as the share of the secret economy decreases, the cases of tax evasion will also decrease, and budget revenues can increase. However, due to the slow pace of public awareness, dishonest businessmen continue to embezzle public funds - tax revenues.
2nd reason. Another form of the shadow economy is the use of illegal labor or the avoidance of taxes by understating the salaries paid to employees. This causes a number of problems in the social security of the worker, and the money that should go to the state budget fills the wallet of a businessman in search of income. How to solve this problem is still relevant.
3rd reason. One of the problems with tax evasion is that some people are less responsible for paying taxes. In this process, tax authorities are entrusted with great tasks. That is, they should strive to appear as a service-providing body, not a coercive one. If a citizen does not pay some taxes, the tax collector should go and explain the situation and the system to him. A citizen may not even know where the tax comes from. But it is important that the expert tells him.


Stage 3
Solution 1. As the secret economy develops, it will definitely have a negative impact on the size of the legal economy. For this reason, it will not be enough to fight only with the state's capabilities to eliminate this huge problem. Significant results can be achieved in solving this problem only if other forces in society, first of all, entrepreneurs, and the general public consider this problem as their problem.
For this, it is necessary to find out what are the problems that hinder their work today through open communication with entrepreneurs. Only then will it be possible to eliminate the shortcomings in time? In these processes, all parties, in particular, political parties, responsible agencies, business entities, and the general public should form dialogue spaces based on mutual trust. If this field can fearlessly raise the painful problems of the topic and offer appropriate solutions to them, if there is cooperation between the government and the people, then surely the shortcomings will be gradually eliminated. But first of all, we need to form that unity.
Solution 2. The development of tax education plays an important role. "Why should taxes be paid?" "What services are provided by the government in return for the taxes paid?" "Do taxes lead to the development of the state and the improvement of the lifestyle of the population?" Intriguing citizens with such questions and providing education about taxes are the most optimal solutions and awaken citizens' sense of patriotism. For example, we can cite countries such as Japan, South Korea, and Singapore.
Solution 3. At the moment, a program to encourage taxpayers when they pay taxes has been organized by the Tax Committee. The name of this program is "Soliq.uz". Through this program, citizens are encouraged to give a check when they buy a product or service at a service provider or business entity engaged in trade. Consumers who receive a check can claim back 1% of the tax they paid for VAT. This is also a good solution, but a certain part of taxes that should go to the state budget is simply distributed to citizens. With this, it is not possible to stimulate in the long term. It causes deficits and expenses in the state budget.


Stage 4
If the solutions to the above problems are applied, the development of the country will increase, the lifestyle of citizens will improve, social services will increase, a large amount of investments will enter our country, the hidden economy will decrease, transparent tax policy will expand, the stratification of the population will disappear in the country, education, health There are positive changes in health care systems and huge changes in several other areas.
Tax transparency is an important part of the financial system of countries. Through this system of transparency, countries will be able to mobilize and manage the necessary resources for payments, sales, revenues and other financial transactions by public and legal entities of the people.
The main goal of tax transparency is to accumulate the country's financial resources, to tax the financial burdens of individuals and enterprises in a fair and stable manner. Through this transparency system, countries will have the ability to formalize consumers, organize financial resources in a fair and efficient manner, manage financial policy, prepare financial statements and reports, and collect tax resources.
Tax transparency can vary depending on the types of taxes used by countries. Tax transparency can also be achieved by honestly transferring VAT, income tax, profit tax, social tax and other types of taxes to the state. The concept of tax transparency is also necessary for the country to provide more services to its citizens in the future.
Tax transparency is important for countries, and with the help of this transparency system, countries will be able to provide a stable tax system for financial consumers, manage financial resources in an efficient and fair manner, and create the necessary opportunities for the financial perspective of the country.