Grade 5 Lesson 3: #Taxes

Taxes are mandatory #monies that a #government gets from its citizens. This #money is then used to pay for things that society as a whole needs but people can’t pay for individually.

The concept of taxes has been around for centuries. In ancient #Mesopotamia, taxes were paid in the form of animals or goods since formal money had not yet been invented. Over the years, different forms of money were invented, and the collection of taxes continued. Today, taxes are collected in different ways and at various levels of government.

Taxes are the main source of #income for the #government and help fund projects that benefit the community. Governments collect taxes for several purposes. The most important purpose is to get money to pay for government #services. These services include protection by an army or police, road building, and public education. Some governments use taxes to change people’s behavior. For example, they may put high taxes on tobacco to get people to stop smoking. Finally, governments may raise or lower taxes to help their country’s overall economy.

Both individuals and companies have to pay taxes on their #income, #profit, sales, property holdings, etc. above a certain threshold. Taxes are mandatory and the #taxrates applicable are defined by the law, so a company or individual cannot skip paying their taxes, and if they do, they face a penalty.

Most types of taxes are due annually, but not all. #Sales #tax, for instance, is paid by the buyer at the time of purchase.

In our next lesson, we will look at different types of taxes.

ayu ecosystem #kids #education #financialliteracy

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