What are taxes?

how to pay taxes
Foto de perfil de Christian Jacobsen
Christian Jacobsen  January 25th 2024

If the state did not have the budget to fulfill its obligations such as health and education, the country would fall completely. This has been going on for years and years and that is why, in order to understand taxes, we must go back to the past.

There are very ancient texts, from more than 5,000 years ago, that mention the existence of tax collectors. Even in the Bible, more precisely in the New Testament, this profession appears. In those times, the form of government was totally different and so was the civilization; however, the way of collecting funds was practically the same.

Basically, taxes are used to cover public expenses. Simple, right? Well, in this article you will understand much more about it and you will see in detail what they are used for and the types of taxes that exist.

What are taxes?

Taxes are the amounts paid to the government so that it can pay for public expenses. Taxes are mandatory and are calculated in the form of percentages. These taxes must be paid by both individuals and corporations. These represent two of the regimes in which you can be registered according to your current job.

Individuals, also known as natural persons, are ordinary individuals, while legal entities, despite their name, are incorporated companies.

What is the purpose of taxes?

Taxes are used to pay the expenses of the state, thanks to them it is possible to finance the construction of public works such as roads, power stations, airports, etc.. They also allow to cover the expenses that are invested in health, education, security, social assistance, among others.

Taxes are also used to pay the salaries of government officials and the entire public power, such as ministries, the armed forces, federal entities and municipalities. In addition, part of the money collected is used to pay the public debt.

The collection of taxes is the main source of state income, without them it would not be possible to maintain a country.

What types of taxes are there?

In Mexico there are basically 3 types of taxes: federal, state and municipal and these in turn are subdivided into two others: direct and indirect. Direct taxes are those paid by those who own something and indirect taxes are those who consume something.

The best known direct tax is the income tax. As indirect tax we can cite the VAT.

Municipal taxes

Municipal taxes are those paid to the municipality. One of the most popular is the property tax, which is the tax levied on a property or real estate.

State taxes

State taxes are those that apply within each state and cannot be transferred to another state. One such tax is the tenencia vehicular tax, which is only levied in some states.

Federal taxes

Federal taxes are the most extensive and as an example we can cite income tax and VAT.

How do you know if you are paying your taxes correctly?

The calculation of taxes is not something that is learned overnight, there are many details that must be considered in order not to make any mistakes.

The lack or delay in the payment of any tax can have serious consequences, therefore, it is something that must be taken seriously and responsibly. Only by paying taxes correctly can inconveniences be avoided.

To avoid any legal problems due to non-payment or incorrect payment of taxes, it is necessary to consult a competent professional to do this task. In this case, an accountant.

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