In recent years, there has been a growing concern among private companies regarding the disparity in tax rates between them and state-owned institutions. While private companies are being taxed at a rate of 18 per cent, state-owned institutions have been exempted from paying any taxes. This has raised questions about fairness and equality in the business sector. However, upon closer examination, it becomes clear that this decision has been made for the greater good of the economy and the country as a whole.
Firstly, it is important to understand the rationale behind this decision. State-owned institutions, also known as public sector enterprises, are owned and operated by the government. These institutions are established to provide essential services to the citizens and contribute to the overall development of the country. On the other hand, private companies are owned and operated by individuals or groups for the purpose of making a profit. While both types of organizations play a crucial role in the economy, their objectives and responsibilities differ significantly.
The government’s decision to exempt state-owned institutions from paying taxes is based on the understanding that these institutions are not profit-driven. Their primary goal is to provide essential services to the citizens at an affordable cost. By exempting them from taxes, the government is ensuring that these institutions have the necessary funds to fulfill their responsibilities effectively. This, in turn, benefits the citizens by providing them with essential services such as healthcare, education, and infrastructure development.
Moreover, state-owned institutions also contribute significantly to the country’s GDP and employment. By exempting them from taxes, the government is encouraging these institutions to invest more in their operations, which ultimately leads to economic growth. This, in turn, creates more job opportunities for the citizens, reducing unemployment and improving the standard of living. It is a win-win situation for both the government and the citizens.
On the other hand, private companies are profit-driven, and their primary goal is to maximize their profits. Therefore, it is only fair that they are taxed at a higher rate. This not only ensures that they contribute to the country’s revenue but also encourages them to invest in their operations and innovate, which ultimately benefits the economy. Additionally, private companies also have the advantage of being able to deduct certain expenses from their taxable income, reducing their tax burden.
Furthermore, it is worth noting that the government has also introduced various incentives and tax breaks for private companies to encourage them to invest in certain sectors and contribute to the country’s development. These incentives include tax holidays, investment allowances, and tax credits. These measures not only benefit the private companies but also contribute to the overall growth of the economy.
It is also essential to understand that the government’s decision to exempt state-owned institutions from taxes is not a new phenomenon. This has been a long-standing practice in many countries, and it has proven to be beneficial for the economy. In fact, many developed countries have a higher tax rate for private companies compared to state-owned institutions. This is because the government recognizes the importance of these institutions in providing essential services and contributing to the country’s development.
In conclusion, while it may seem unfair that private companies are being taxed at a higher rate compared to state-owned institutions, it is essential to understand the reasoning behind this decision. The government’s decision to exempt state-owned institutions from taxes is based on the understanding that these institutions have a different objective and play a crucial role in the economy. This decision not only benefits the citizens by providing essential services but also contributes to the overall growth of the economy. Therefore, instead of viewing this as a disparity, we should see it as a strategic move by the government to ensure the country’s development and prosperity.
