Inflation or deflation over the years. Concept Introduction: Inflation: Inflation is the rate at which the commonprice level for goods and services are increasing at increasing rate. Disinflation: Disinflation is the slowdown in the rate of inflation. There is increase in the price of goods, but the rate of increase is lesser as compared to the previous year. Hyperinflation: Hyperinflation is the high increase in the rate of inflation. There is highincrease in the price of goods, but the rate of increase is also very high as compared to the previous year. Deflation: Deflation is the rate at which the commonprice level for goods and services are decreasing.

Question

Discuss the preferred deterrent method employed by the Zambian government to combat tax evasion, monetary fines. As noted in the reading the potential penalty for corporate tax evasion is a fine of 52.5% of the amount evaded plus interest assessed at 5% annually along with a possibility of jail time. In general, monetary fines as a deterrent are preferred to blacklisting of company directors, revoking business operation licenses, or calling for prison sentences. Do you agree with this preference? Should companies that are guilty of tax evasion face something more severe than a monetary fine? Something less severe? Should the fine and interest amount be set at a different rate? If so at why? Provide support and rationale for your responses.

Answer 1

Question

Chapter 7, Problem 3.7P

To determine

Inflation or deflation over the years.

Concept Introduction:

Inflation: Inflation is the rate at which the commonprice level for goods and services are increasing at increasing rate.

Disinflation: Disinflation is the slowdown in the rate of inflation. There is increase in the price of goods, but the rate of increase is lesser as compared to the previous year.

Hyperinflation: Hyperinflation is the high increase in the rate of inflation. There is highincrease in the price of goods, but the rate of increase is also very high as compared to the previous year.

Deflation: Deflation is the rate at which the commonprice level for goods and services are decreasing.

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Discuss the preferred deterrent method employed by the Zambian government to combat tax evasion, monetary fines. As noted in the reading the potential penalty for corporate tax evasion is a fine of 52.5% of the amount evaded plus interest assessed at 5% annually along with a possibility of jail time. In general, monetary fines as a deterrent are preferred to blacklisting of company directors, revoking business operation licenses, or calling for prison sentences. Do you agree with this preference? Should companies that are guilty of tax evasion face something more severe than a monetary fine? Something less severe? Should the fine and interest amount be set at a different rate? If so at why? Provide support and rationale for your responses.

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Discuss the preferred deterrent method employed by the Zambian government to combat tax evasion, monetary fines. As noted in the reading the potential penalty for corporate tax evasion is a fine of 52.5% of the amount evaded plus interest assessed at 5% annually along with a possibility of jail time. In general, monetary fines as a deterrent are preferred to blacklisting of company directors, revoking business operation licenses, or calling for prison sentences. Do you agree with this preference? Should companies that are guilty of tax evasion face something more severe than a monetary fine? Something less severe? Should the fine and interest amount be set at a different rate? If so at why? Provide support and rationale for your responses.