Wednesday, 11 May 2005

Business taxes and regulations

At my workplace the other day, I noticed a CD from the Inland Revenue containing information for businesses on how to complete tax forms. My boss must have left it lying around by mistake.

I was amazed to see how complex the tax system is! So many forms need to be completed by businesses, simply to be compliant with government regulations. Why is there any need for this?

People who start businesses do so to make a profit, not to fill in forms for the state. It's not just that businessowners spend more time filling in forms than creating or selling their good or service. Surely the government must realise that excessive taxation on business would be detrimental to businessowners. It would also deter people from starting businesses, if the burden of taxation is too high. Also, small business pressure groups for many years have been making complaints to the government in regards to the level of regulations. Sadly, such complaints have fell on deaf ears.

Under a libertarian government, there would be little need for business taxation. Government would be small enough to go without such a thing. With no business taxes, companies (from sole traders right through to multinationals like HSBC) could be free to spend greater time selling their good or service. The funds saved in taxation would allow more money to be spent on reinvestment, hence creating more jobs and producing a stronger economy.