Tax compliance means the responsibility of the taxpayer to follow the tax rules as set by the government. This is important for new and upcoming businesses as it helps in the smooth running of the company. Tax compliance has a number of advantages. People on the lookout for jobs tend to join companies that function according to the rules and regulations. Also, if a firm pays its taxes on time, it will not have to face fines or penalties and thus can save money.
Tax compliance can help the company to develop a feeling of trust in its customers as it would have followed all the necessary legal obligations. The better the image of the company, the better will be its acceptance in the public, which in turn will gain its market share.There are two main types of compliance - external and internal. External compliance refers to meeting the standards and guidelines set by the government. Internal compliance means the rules that govern the internal state of affairs of a company. Both these are essential for the positive growth of the company.