Opinion: Why paying your taxes makes good business sense
The other day I was having a chat with a fellow I met at a friend's party. In the course of our conversation we got to talk about business (comes naturally to me) and taxes in particular.
He told me he is a fabricator (makes metallic windows, doors and gates for houses) and he has been in this business for close to three years now.
About tax, he told me he wants nothing to do with the tax man. He knows this will limit his market reach but it's okay he is comfortable working for small and individual clients who pay little but like him have nothing to do with the tax man.
I closely listened to him and in my mind all I could think is, this man is comfortable with his one slice of bread even when there's a possibility of having the whole loaf. He just wants to play it small and if it can put for him food on the table and offer him an average life he is good to go. If you are like him its okay, live on.
I will say this the millionth time. No one wants to pay taxes more so when your concerned about what the taxes are going to do or how they're going to be used.
In the same spirit no one wants to take medicine but this has nothing to do with what you want but what you need, so take the medicine or die from the disease.
Regardless of where you start your business in the world, when you do start government becomes that unwanted partner who takes out their share in the business in form of taxes.
The quicker you learn to live with it the happier you'll live and the more money you'll make because that will be your only focus.
So if you want to do big business with big monies that's one thing you have to make peace with. If you want to play it small then it's fine, the tax man may not have the incentive to come after you because of the little monies involved in your operations but that will keep you in the small bracket for good until playing small kills you off itself.
Yes, when you fail to grow you die out as everything around you like inflation, costs of operation grow.
To most, tax is a nightmare because most don't understand it and if you did you'd not have issues with it. If you knew that you don't pay taxes (the consumer does) or that you don't get taxed for making losses or no money then you'd not dread taxes that much.
If you knew that you determine your taxes and only when you don't do so does the tax man do it for you then you'd not worry about tax.
If you understood that it's fine for you to spend all your income on yourself to zero balance and have nothing left to give the tax man you'd be a happy man or woman.
No one is taxed for not making money. Always factor tax in your pricing and you'll have nothing to worry about.
We said government is that unwanted business partner, share with him/her by filing returns how your business is fairing at least twice every year like you'd do with other shareholders to avoid unnecessary fines.
Fearing taxes while doing business is like fearing having sex while married because you may have a baby you fear taking care of.
Tax shouldn't be a problem for you it's very manageable just get a good tax advisor/consultant. A lot of people are paying way more taxes than they're supposed to be paying. A lot are paying taxes they shouldn't even be paying.
If you don't determine how much you should pay by yourself the tax man will do it for you and when given a chance, he never asks for little money.
So embrace tax, don't make it become that stumbling block to your business success. I can tell you it's manageable if handled well.
Jaluum Herberts Luwizza is a Speaker, Writer and Business Columnist with the Nile Post. He is also a Business Consultant at YOUNG TREP East Africa's No.1 Business Management and Consultancy firm that helps people start and grow profitable businesses.
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