What are the positive and negative effects of taxation on a business?

Answer 1

Taxation can have both positive and negative effects on a business. On the positive side, taxes contribute to public goods and services, such as infrastructure and education, which can enhance the business environment and support economic growth. Conversely, high tax rates can reduce profit margins and limit funds available for reinvestment, potentially stifling growth and innovation. Additionally, complex tax regulations can create administrative burdens for businesses, diverting resources away from core operations.