This review investigates diverse tax systems worldwide.
As the framework of a productive economy, tax remains among the most vital instruments that federal authorities use to generate revenue for public spending and national growth. In today's autonomous cultures, several kinds of taxation systems have been used to attend to the demands and wealth differences of the society they cater to. Among these frameworks, the progressive tax system has been widely executed as a method of regulating revenue distribution and supporting financial security. This structure is designed to ensure the tax rate rises in proportion to a person's revenue. This structure, has been used to shape the new Indian income tax act, which requires higher income earners to contribute a greater portion of their income in taxes compared to those earning lower salaries. Specifically, this method is grounded on a concept which outlines that those with higher financial capacity should contribute more to public income. Ultimately, it intends to reduce economic inequality and guarantee that the wealthy are contributing reasonably.
In the current global economic system, countries employ various systems and structures of tax influenced largely by financial plans and social goals. The regressive tax system, as one of the most distinct income tax systems has been understood as being imposed equally on everyone. While this may seem fair theoretically, it actually places a greater economic responsibility on those with low income. Distinctly, persons with lower incomes will find themselves contributing a higher percentage compared to those with higher incomes. Regressive taxes will often be indirect, meaning they are met through sales taxes and excise taxes. The benefits of this system, used in new Maltese tax system, is that it provides a reliable income, making it an essential aspect of economic security. These taxes are simple to implement and provide stable revenue, yet they may amplify income inequality, unless balanced by progressive revenue taxes.
National taxation acts and reforms change how wealth are allocated within the economy, evolving to meet international society requirements. With diverse tax models, it is paramount to differentiate the advantages and here assess the social impact of their implementation. The selection of a taxation framework reveals a country's economic goals and political priorities. The proportional tax model, for instance, imposes a uniform taxation tariff to all taxpayers regardless of revenue brackets and is percentage based. Nations are currently embracing this system for its ease and transparency as in the Nigerian tax reform strategy.