A paper which explores one particular issues or dimension of legal Essay

A paper which explores one particular issues or dimension of legal environment which directly impacts business - Essay Example The tax systems determine the competitiveness of any given business with similar businesses all over the world. There are numerous taxes that impact the business either directly or indirectly. These include income taxes, employment taxes (National insurance), corporation tax, capital gains tax, value added tax (VAT) (sales tax), excise duty, import duties, specialist taxes, and property taxes as well as business rates (Simister). The politicians all over the world have colluded to tinker the tax policies. This implies that as globalization is taking place and businesses expanding, the tax policies get complicated and there are more loopholes that impacts businesses both directly and indirectly. This paper discusses the taxes and the impacts they have accustomed on businesses either at local or global levels. The first impact of tax is on the profits of the business. At the federal level gains and profits are taxed. This affects the business’ overall profit since part of the profits is submitted to the government in the form of taxes. The businesses cannot expand because the businesses cannot expand or employ more people so as to improve on their outputs. For example, if a company makes a profit of one hundred thousand dollars and the tax rate is thirty percent then it means that three thousand dollars will go to the government as tax (Djankov, Ganser, McLiesh, Ramalho, and Shleifer 246). This cost, therefore, will be transferred to the product and services prices for the company to meet its objectives; as a result the business might fail to perform well due to reduced consumers demand. If tax rates are unfavorable in a given area or country, most businesses may fail to invest in the location thus reducing their abilities to expand (Yoshov and Brumbaugh 40) Secondly, tax rates affect the structure of a given business. A