Tax is a compulsory payment levied on individual or business organizations by the Government.
Different countries have different tax rates and tax can be levied on citizens income like salaries, and goods purchased.
Tax Evasion is non-payment of tax illegally or underpayment of tax.
People or businesses use different methods to avoid paying tax one of them is falsely reporting revenue and profit for business and salaries for individuals for example of Orange LTD made $100,000 profits the owner can falsely bring that amount down by recording $70,000 as profit and if the tax rate is around 10% he pays $7,000 as tax instead of $10,000 and keep the remaining $3,000
Another way of evading tax is by falsely increasing expenses instead of falsely reducing profit as stated above. Because the Government tax business organizations based on their profits not revenue. For instance if Paws LTD earns $100,000 income and spends $10,000 doing renovations which means their taxable income is 90,000 and if the tax rate is 10% they will pay $9,000 as tax.
But They can easily claim that the renovations cost a total of $40,000 and their taxable income would be 60,000 and if the tax rate is 10% they pay only $6000 as tax.
Tax evasion is illegal and if caught would be punished by the law
Tax evasion is illegal, but no more criminal than avoiding any other mafia extortion racket.
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