Taxation Impacts on International Business - Essay Example

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Tax system Name Institution Taxes are some of the major contributions to the national as well as global treasury. It can be used to determine the nature of the global economy. There are regional and international taxes which are all determined by specific agencies under the monitor of the central bank…
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Taxation Impacts on International Business
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"Taxation Impacts on International Business"

This work focuses on some tax issues including comparison between two countries with different tax management and strategies. The aspect of taxation has great implications for the international business. International business relies on financial institutions like international banks for debit capital. The loan interest rate is a subject of taxation; hence it would be right to say that taxation determines the funds available in such banks for loaning purposes. It is worth mentioning that major contributions to the national and global treasury are from taxation. Global economy determines the prevailing exchange rates, currency values, and interest rates among other international business elements, and all these determine the prosperity of international business. It also determines the international competitiveness which means the economic ability of a certain region or domestic business to compete with other international business in the global market arena (Feldstein, 2007). A business should be able to maintain sustainable balances irrespective of the adopted business strategies. Salaries of a majority of citizens are always subjected to some percentage of taxes. Reduced tax rates would imply increases in income and ability to purchase international products, and this promotes the international business. ...
The U.S multinationals are likely to make huge profits in other nations than when such businesses were established in the U.S (Lessambo, 2009). Then it would always create space to be occupied by other multinationals from other countries and enable the government earn extra payments from foreign exchange. The U.S tax system is organized into two basic categories namely the federal and state level. The country has different taxes and this include the income, sales as well as capital or profit taxes. The constitution of the United States provides different authorities to the State and federal governments when it comes to tax management, and none is capable in meddling in the affairs of the other. Every state has different taxations schemes or systems. The State may also have some institutions mandated to charge taxes and these include county and major township jurisdictions. Kenya, on the other hand, has its tax system managed by the central government. The country has a body named Kenya Revenue Authority (KRA) which is mandated to collect and manage the taxes. All the funds generated from taxes are channeled to the national treasury through the ministry of finance (Thirsk, 2000). KRA has to liaise with the ministry of finance and the Central bank of Kenya and determine the taxation charges. The national treasury determines how the collected taxes are used to meet national projects. Both countries charge some taxes on citizens’ income. The countries deduct some amounts from the employees’ paychecks. However, income tax is managed differently by the two countries. In the United States, an employee is to pay some taxes to the both the federal and the state levels. This is one of Read More
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