Tax is defined as a mandatory financial fee imposed by the government on everyone who is subject to the tax burden, whether an individual or a financial institution by a government organization, in order to finance government spending and various public expenditures, where the main objective of taxes is to provide good revenue for the government.
As for the fee, it is a fixed price that is imposed on a particular service. The fees are applied in a variety of ways, such as; Costs, commissions, penalties, and fees are the most common and widely used forms of transaction services and are paid in lieu of wages or salaries.
What is the difference between a tax and a fee?
There are many differences between tax and fee, including:
Target
Fees are mostly imposed to regulate or control different types of activities. As for taxes, their objectives are many, and they do not have a separate objective, as taxes are imposed in the major interests of the country, and one of the most important reasons for imposing taxes is to provide a good return for financing government activities and purposes.
Payment is mandatory.
Taxes are paid compulsorily, and they are collected for government agencies. As for fees, they are collected to provide services that benefit individuals, just as taxes are collected from taxpayers by the competent official authorities, and taxpayers cannot obtain services in the amount paid, but the issue of fees is different; a payer may get a fee on some of the benefits that he is entitled to join once the fee is paid.
Financial returns
Taxes are one of the most important and largest financial returns on which countries depend, as they are used to achieve the main benefits of development and investment, while fees are a secondary return for government agencies because they are collected to pay the expenses of workers and government agency employees.
Review
Taxes cannot be the same for all periods. Taxes must be reviewed periodically by the taxing authority. In terms of fees, they are a voluntary payment to the government for special services they provide in the public interest, but they give a definite advantage to the person who pays them.
Exemption
The exemption explains the difference between taxes and fees, as no individual can be exempt from the service fees he receives. As for taxes, there are some special circumstances that can be exempted, and exemptions are determined according to national laws, and this applies to people with disabilities, private associations in most countries, and charitable and non-profit organizations.
Species
You are probably well aware that taxes such as income tax, sales tax, and property tax are also a large source of government revenue, especially at the local level, and there are a wide range of taxes and fees that are assessed by local and federal government agencies.
Tax types:
- property tax.
- sales tax.
- Income tax.
Fee types:
- retail fee
- Loan administration fees.
- Auto oil sales fee
Read also: The most important sections of overhead
