Why Tax Compliance Is A Nightmare For Many Companies

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Why Tax Compliance Is A Nightmare For Many Companies

‘You don’t pay taxes — they take taxes’.

There are some inevitable things that life throws at us. Many people would answer as death being the most inevitable of them all, but there is something else. Taxes, choke you and almost suck the life out of you when alive. All of us would really love to dodge taxes but they are taken, whether you like it or not. Complying to all the tax rules and regulations is another pain in the neck!

  • What are the major compliance risks to be addressed ?
  • How should these risks be treated for a successful business ?

According to a recent World Bank Study, India ranks 156 out of 189 in ease of paying taxes. Lets dive deeper into this process of Tax Compliance and what makes it so frightening :

What Is Tax Compliance ?

  • The degree to which a taxpayer complies with the tax rules of his country, like declaring income, filing returns and paying taxes in a timely manner.
  • The ideal compliance policy targets tax evasion and avoidance at all times.
  • Tax complexity can shield income from tax and taxpayers can make mistakes unknowingly while calculating tax liabilities. So maintaining a simple tax system in a way that is easily compliable by all is of prime importance.

The Government lays the framework for the companies to compete against each other. From time to time,there is a revamp in these tax compliance rules which pains the businesses. So companies always watch out keenly for any updates on tax compliance. Let’s look at the instances when tax compliance bothers business :

Lack of Knowledge
A sound knowledge of the entire tax compliance system is the foremost key to a hassle free compliance system. Imagine if your finance/accounting professionals are naive and are least bothered about managing the business taxes efficiently. The result? It strikes an ugly line in the growth of the business, unnecessary tax exposure, poor compliance and penalties leading to lack of customer goodwill. Make sure you are capable of addressing all the tax compliance risks with efficient professionals.

Frequent Changes In Tax Compliance
Tax compliance is always prone to frequent changes. Laws keep changing, new modifications keep coming in – How well are you aware of all these? Always observe emerging trends like a hawk. You may overlook any recent updates and there is no way out when you realize it. The penalties are indeed very disturbing. So it is always wise to keep abreast of tax compliance updates from professionals like us. Subscribe to our blog.

Poor Management
A company consists of diverse tax compliance & reporting requirements. Managing each one according to the compliance rules is no cakewalk. It needs meticulous and dedicated professionals who are experts in this process & exactly understand how it works. No one is the same,nor works the same. Tax Compliance can be a win only if it is guided by an exceptional team with sound knowledge in taxes.

Finance/ Accounts Professionals manage tax compliance activities for their business is what we all know. But have you ever thought about the massive hours they spend behind evaluating each taxation activity ? Tax Compliance is indeed a very composite system, see that you know in and out of it.

Here are some of the Taxes, most businesses deal with :

  • Income Tax
  • Minimum Alternate Tax (or) Alternate Minimum Tax
  • Tax Deduction at Source
  • Central Sales Tax
  • Local Value Added Tax (VAT)
  • Service Tax
  • Central Excise Duty

Want to know the various due dates, activities and filings need to be done by each company for the above ? You will find our Statutory Compliance Calendar useful then ! Click to download.

So, why let Tax Compliance consume your precious time and efforts ? At Relativity, fondly called as ‘The Compliance Experts’ we undertake your tax compliance needs with utmost accuracy. We assure you a smooth and sleek fashion to manage your tax compliance. Bank on the professionals, contact us here.