Ch31: Taxation

• Financial Purpose of Taxation:

  • Provide an income for the government so they have the funds to run the country and its departments, ex) education, health.
  • Promote the sale of Irish goods and services. This is done by taxing imported goods from non-EU countries, making them more expensive.
  • Help industries by reducing the VAT rate for their goods and services. Ex) the government introduced a 9% VAT rate for the tourism and hospitality sector.
  • Encourage people to buy goods and services by reducing income tax, leaving them with a higher disposable income.
• Social Purpose of Taxation:

  • Provide money that the government can use to improve social services, such as healthcare and education, and to increase funding for the Garda who aim to reduce crime and anti-social behaviour.
  • Protect the environment by imposing taxes on oil and fuel, along with other materials that damage the environment.
  • Provide money that the government can give to city councils to improve infrastructure and amenities such as roads and parks.
• Legal Purpose of Taxation:

  • The law requires all citizens of the country to pay their share of taxes. Those who don't are charged fines and penalties when caught, possible ending up in prison. This is known as tax evasion.
  • The money collected from taxation is used to keep the law and order running in the country. The tax money pays for the Gardai, prisons and prison officers and the court service, including the free legal aid service, providing solicitors and barristers.
• Ethical Purpose of Taxation:

  • Redistribute income in a fairer way by taxing high income earners more than the low income earners, then using this money to provide services and benefits to the low income earners.
  • Raise money for the Department of Social Protection, who distribute the tax money as social welfare and Jobseekers Benefit to the homeless and financially struggling.