Tax payments are supposed to be paid when due. But in doing so, sometimes taxpayers pay extra payments. The extra payments are what taxpayers pay over and above the actual amount. These payments are in tax fines, penalties, and interest.
a. Affiliate Disclosure: These are affiliate links from which we receive a commission at no cost. Read the full Affiliate marketing disclosure HERE.
b. Tax Contents Disclaimer: The tax industry in Kenya is very dynamic. The tax contents in the posts are not professional advice. Read full disclosure HERE.
When taxpayers make payments that they are not supposed to pay in ordinal circumstances, this negatively impacts them. The negative consequences are to the taxpayer as an individual and their relationships.
The following is an explanation of the consequences.
Consequences to extra tax payments to individual taxpayers
Taxpayers are either natural persons or legal persons. Natural persons are individuals. Persons pay tax either as individuals or under organisations.
The following are four direct consequences to the taxpayers as individuals:
1. Destruction of lives of the individual taxpayers and family
Unless appropriately handled, extra tax payments may destroy a taxpayer’s life. It is not only the taxpayers life that will be destroyed, eve the family’s life may be destroyed.
For example, if taxpayers cannot pay the additional taxes, they may become stressed out and turn to illegal drugs and alcohol to manage the stress. The extra tax payments may destroy the individual taxpayer’s life and their dear ones.
2. Inability to transact business
Inability to transact business by the taxpayer may result in the eventual collapse of the business. Consequently, the taxpayer will not have a business, and the workers in the business will be laid off.
This will further destroy lives, including the businessperson’s immediate and extended families.
Source: Pixabay
3. Diseases from the stress of managing the extra tax payment
Diseases from the stress of managing the extra tax payments. When taxpayers do not have adequate money to pay the extra taxes, they will get stressed from that fact. The taxpayers must figure out where to get the money to pay the extra tax payments.
The stress may lead to sickness. Some of the diseases that may result from stress are, for example, high blood pressure and other associated illness. The illness may also affect other family members either directly or indirectly.
4. Taxpayer’s death
The taxpayer’s death from the stress and all other associated diseases resulting from paying the extra taxes. The taxpayer may not have the money to pay the extra taxes.
Death may also result from suicide when the taxpayer feels overwhelmed by the problems associated with the extra tax payments.
5. Consequences to taxpayer’s relationships
There are also consequences to the taxpayer’s relationships with themselves and others. Taxpayers do not live in a vacuum. They have many relationships.
Many of the relationships may collapse because of extra tax payments. The collapse of the relationships depends on the coping mechanisms of the taxpayer.
The following are five relationships that may be affected negatively by extra tax payments:
6. Marital strive
Marriage relationship where the taxpayer may stress members of their immediate families. The member likely to be most affected is the spouse. Stressing spouses may lead to strained marital relationships, resulting in separation or even dissolution of the taxpayer’s marriage.
7. Relationships with children
Relationships with children because the stressed taxpayer is not an active parent. The stress and the money denied to the family due to the extra tax payments might affect the relationship between the taxpayer and their children. The effects on the broken parent-children relationship may be passed on to many generations.
8. Relationships with taxpayers’ relatives
Relationships with taxpayers’ relatives. Taxpayers have other relations apart from their spouses and immediate families. Relatives may demand attention or money from the taxpayer. If the taxpayer cannot provide the same, there may be conflicts. This may result in the collapse of relationships.
Source: Pixabay
9. Relationships with friends
Relationships with friends may also be affected by extra tax payments. However, this depends on the level of friendship. If the friendship is close, it may be adversely affected by the stress experienced by the taxpayer.
The relationships may also be affected if the friends refuse to assist the taxpayer in sorting out the issue of extra tax payments. The friendships may be strained.
10. Relationships with business associates
Relationships with business associates. If a taxpayer is a business association with other people who hold shares in the business, the extra tax payments will be a source of dispute. Their relationship with business associates may be adversely affected forever.
Conclusion of consequences of extra tax payments
This post examined some of the consequences of extra tax payments to individual taxpayers (fines, penalties, and interest) by the individual taxpayer. Many other consequences that the individual taxpayer experiences paying the extra taxes were not examined.
This post was on consequences of extra tax payments to individual taxpayers.
We trust you have learnt something.
Thank you for reading the post.
Dr. Wakaguyu wa-Kiburi
Remember to visit the E-Store for books HERE
Don’t just leave …
We would love to hear from you. Send any questions or messages to us using the form below …
