- 4 Marks
AT – March 2023 – L3 – Q3d – Business income – Corporate income tax
Discuss how tax laws treat business losses and support business growth through loss carry forward.
Question
ou have been asked to contribute to a public forum on the topic “business losses though not good have a direct effect on business development and growth as they are deductible allowances.”
When businesses make losses, to the extent that the losses are allowable, management becomes happy from the standpoint of taxation while shareholders are not too happy about the losses as these may make it impossible for them to receive dividends.
Required:
How are tax losses treated in businesses and how do the tax laws support the growth of businesses in loss-making?
Find Related Questions by Tags, levels, etc.
- Tags: Business losses, Loss carry forward, Tax Incentives
- Level: Level 3
- Topic: Business income - Corporate income tax
- Series: MAR 2023
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