An individual or an entity is required to pay tax depending on the amount of income or even profits they receive and this type of tax is commonly referred to as the personal tax. The amount of personal tax one is required to pay is determined by the rates imposed in the given state or country on the incomes and profits. Personal tax usually increases as the incomes and profits of the individual increases hence is usually referred to as progressive nature. The total income less any activity that generates tax and other deductions imposed is the amount used to calculate the personal tax to be paid by resident individuals in the given state or country. The net gain obtained after sale of any property such as goods for sale that have been held is taken as part f the income that personal tax is imposed. Personal tax is imposed on certain income sources non-residents obtain from activities carried out within the state or region.
Imposition of personal tax is usually based on certain principles such as the taxpayers and rates, residents and non-residents, defining income, deductions allowed, business profits among others. Individuals and entities that have not been legally identified as corporations are usually imposed on personal tax where the rates depends on the slab where the income falls. Money received from service compensation, sale of property and goods, dividends, interest, royalties, rents, pensions, annuities among others are some of the income sources where personal tax is charged. The only incomes exempted from personal tax includes those from superannuation and national payment plans after retirement.
Payment of personal tax should be done on regular basis depending on the rate at which one receives their income. The body that collects tax provides an online platform where individuals and entities can make payments for their personal tax. Timely payment of personal tax enables one to avoid penalties of default. In case there are penalties and interest that one is required to pay to the government, it is important to pay them as soon as possible to avoid more penalties and interests.
One enjoys various benefits for complying with the personal tax systems other than just not being imposed with penalties and interests. Compliance enables one to obtain loans easily from financial institutions to develop themselves since it is a requirement to show one’s compliance to the tax systems. Also there are country that requires one to show their tax statement for the past years so that they can be granted visas to visit the country. An individual will also enjoy tenders from the government and other public institutions as long as there are credible which is determined by the payment of their personal tax.