COVID – 19 EFFECT ON TAX COLLECTION

In Partial Fulfillment of the Requirements in

AINTERN
Section Code: 356

Submitted By:
REGAÑA, EMERY JOY
ANABO, IVAN G.
BSA – 4

Submitted To:
MRS. ANA LAVINA DEPASUPIL
Teacher

July 29, 2021

I. INTRODUCTION

Economic contagion is now spreading a s fast a COVID-19 itself. Social distancing,

intended to physically disrupt the spread, has severed the flow of goods and people,
stalled economies and we all have been affected by the current COVID-19 pandemic that
has led to a dramatic loss of human life worldwide and presents an unprecedented
challenge to public health, food systems and the world of work. The economic and social
disruption caused by the pandemic is devastating: tens of millions of people are at risk
of falling into extreme poverty, while the number of undernourished people, currently
estimated at nearly 690 million, could increase by up to 132 million by the end of the year
(Chriscaden, 2020).

According to Fouad (2020), the World Health Organization declared that COVID-
19 was a global pandemic, indicating significant global spread of an infectious disease. In
this case, the government implements lockdown that forced different business to close
their operation. Closing the businesses means less job and less profit for the company
which lead to a lesser amount of income tax that will be remitted to the government.

The inherent right of the state to garnish and collect a percentage of each and every
individual and entity's revenues from successful undertakings inside the state's political
boundaries is known as taxation.

Taxation has always been an important aspect of any government around the
world. When compared to an automobile, tax is the fuel, and the government is the car.
The car will not move without fuel. Taxation is what keeps the government running
(StudyMoose, 2021). They further added that different tax rates are employed to disperse
the burden among the various classes of the population, and tax rates alter to keep up
with changing requirements and rapid improvements.

COVID-19 is not only a global pandemic and public health crisis, because when
the government remitted less amount of income tax, it affects the global economy as well
as financial markets. The disease mitigation measures that have been imposed in many
nations have resulted in significant income reductions, increased unemployment, and
disruptions in the transportation, service, and industrial industries and etc. Most
governments throughout the world appear to have misjudged the risks of rapid COVID-
19 spread and have been primarily reactive in their crisis response, because disease
outbreaks are unlikely to go away anytime soon, proactive international action is
necessary to preserve lives while simultaneously securing economic growth.