PROFIT TAX AND TURNOVER TAX: THEIR ESSENCE AND ROLE IN THE ECONOMY

Abstract

This article explores the essence and role of profit tax and turnover tax within the economy. Profit tax, levied on the net income of businesses, serves as a critical source of revenue for governments and plays a significant role in economic planning and resource allocation. Conversely, turnover tax, imposed on the gross revenue of businesses regardless of their profitability, simplifies tax compliance and can stimulate business activity, particularly in emerging economies. The article examines the implications of both taxation systems on business operations, investment decisions, and overall economic growth. It also discusses the advantages and disadvantages of each tax type, providing insights into how they can be effectively integrated into fiscal policy to promote sustainable economic development