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. Personal tax is usually charged depending on the tax rates imposed in the given state or country on the incomes and profits. Personal tax is usually imposed in a progressive way where the amount of the personal tax increases as the incomes and profits of the individual increases. 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. For non-resident individuals in the country or state, personal tax is only imposed of income sources of certain activities carried within the region.
There are various principles that govern the personal tax systems and how it is imposed on individuals such as the taxpayers and rates, residents and non-residents, defining income, deductions allowed, business profits among others. Personal tax is only charged on individuals and entities that have not been legally identified as corporations and the rates depends on the slab where the income falls. The defining income where personal tax is charged may include the money they receive from services compensation, sale of property and goods, dividends, interest, royalties, rents, pensions, annuities among others. There are those incomes that one is nor required to pat the personal income such as the superannuation income and national payment plans after retirement.
Depending on how one receives income, it is important to make payments of personal tax on regular basis. This is usually done online in the sites provided by the body mandated with collection of tax from citizens in the region. Payment on time of the personal tax is usually done to avoid penalties one is likely to be slapped with by the regulating body. When one is slapped with these penalties and interest, one should pay them soonest possible to avoid them accruing as time moves on.
Other than preventing an individual from be slapped with penalties and other interest, there are other benefits that one is likely to enjoy with timely payment of personal tax. 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. Another benefit is that it is easy to obtain visas to travel to countries that require one to provide a tax compliance certificate for several years back to show their credibility. It is also a requirement in all states to have the tax compliance certificates so that they can be successful in case one is applying for a tender in a government institution.