Businesses are important to every country’s economy, and they contribute a large share of all taxes to both the home and host countries. Do you know business and government both have responsibilities for each other? WHAT IS ACTUALLY FOUND AS THE STRONG GOVERNMENTAL RESPONSIBILITIES OF A BUSINESS ORGANIZATION? Here in this article, we will discuss what are the responsibilities a business needs to follow towards the government of home and host countries. Every country has its own government, which has its own set of rules and regulations for conducting business on its territory. The government operates hard to protect enterprises and promote their growth in the country. Because a company’s prosperity is dependent on the development of the community, it must be extremely careful in fulfilling its responsibilities to the government. Many consider there are some major responsibilities to follow towards the government, some even talk about vast responsibilities of business towards the government. I have tried to cover the majority of the responsibilities the business should follow for the government.
Business responsibilities towards the Government
a) To follow the law:
All of the government’s rules and regulations must be followed by the organizations. The better the regulations are followed, the better the business’s environmental interaction with the community and the business community will be controlled. This technique will undoubtedly result in the creation of an ecosystem. A business exists to make the world a better place. Only when business follows the law can society function smoothly, and only when society functions smoothly can business progress. However, business, in its pursuit of profit and prosperity for the organization, can occasionally be harmful to society. These firms undoubtedly contribute to a financially sound society, but they also have a negative impact on society. As a result, the environment is destroyed. Again, everyone who wishes to start a business must follow the country’s government’s complete and applicable requirements.
b) Taxes are paid on time:
During the course of their activities, a corporate organization must ensure that they are paying taxes correctly. The tax generates a large quantity of revenue for the government, which may be used for the greater good of society. The government’s main source of revenue is various forms of taxes. It is critical to pay taxes so that the government can provide assistance and the company may operate correctly. The company pays taxes on goods it produces, taxes on goods it imports, taxes on its own earnings, and taxes on the earnings of its employees. The government can easily fulfill its tasks if a business pays its taxes honestly and on schedule. Varying types of businesses must pay different amounts (%) of tax. Corporations contribute a significant amount of tax money. Corporations play a significant role in taxation in various nations. Corporations in Denmark, for example, are required to give the government 40% of their earnings as tax revenue. A modern government’s expenditures are substantial, and they are rapidly increasing. In each given country, the corporate tax rate fluctuates from time to time. In this situation, the corporate sectors that make a lot of money have to pay a lot of money in revenue.
c) CSR Tax Advantages:
Companies that pay taxes between 27.5 percent and 45 percent on their annual incomes currently qualify for tax breaks for their CSR activities in more than 20 areas. Donations to victims of natural catastrophes, aged homes, special-needs groups, schools for floating children, slum dweller housing, and specialist hospitals for free treatment of the underprivileged are among the categories. Donations to government-approved educational institutions for the establishment of computer labs, public universities, and migrant worker vocational training institutes, as well as emancipation.
d) Develop Social Responsibilities:
Aside from legal responsibilities, businesses must also have a moral responsibility to society. Investors and consumers seeking investments that are not only profitable but also contribute to the well-being of society and the environment are increasingly concerned about social responsibility. Before making an investment or purchase, they always look for a company’s commitment to socially responsible activities. Company morale can be boosted through social responsibility, and this is especially true when employees are involved in the company’s social causes. Many businesses have incorporated social responsibility into their business structures. Starbucks Corp., for example, has integrated social responsibility into the core of its operations. As part of its social obligation, the company should give training opportunities for jobless people so that they can find work or start their own businesses. It is helpful in gaining compassion from the public. This is a critical and significant investment made by the company. According to experts, social duty contradicts the very purpose of being in business.
e) Financial Transparency:
Financial and business interest disclosure is a legal requirement for one or more types of public officials in a particular country to reveal information about the company’s assets, income, debts, and costs, as well as other business operations. Tax returns are required to reveal all financial statements to the government. If the corporation owns shares of stock, they should be made available to the public as well. It boosts the public’s and government’s trust in the company. This financial disclosure provides openness, allowing the public to decide whether or not to invest in the firm while also ensuring that the organization is not breaking any rules, such as withholding taxes. Financial disclosure may be justified in order to safeguard individual enterprises or organizations from substantial risk, serious criminality, or other legal violations.
f) Contracts with the Government:
The point at which we identify a standard for making the best decision for business organization government is not an expert in infrastructure construction. Better roads, buildings, highways, and equipment are sometimes required by business organizations to ensure the welfare of the business industry. In such cases, the government purchases tenders to ensure that such projects are completed properly. By issuing tenders, the government has a positive impact on the business. The government must undertake a number of projects, including the construction of roads, bridges, flyovers, and airports. These works are sometimes undertaken by government departments, but a more common method is to invite tenders and award contracts to businesses. It is the business’s responsibility to complete the work on time while maintaining a high level of quality.
g) Providing Information:
Government is a system that is involved in a variety of dramatically divergent activities. The government ensures that its citizens have access to education, training, and development. Legislative functions are sometimes performed by the government. The government is constantly working to ensure the welfare of society and others. Furthermore, the government has the authority to make the best decision for its business. Business entities can sometimes act as consultants. As a result, the firm participates in a round table discussion with the government. They provide the government with ideas on how it may benefit businesses by creating favorable conditions. They must provide the government with information on tax, fiscal, monetary, and industrial policy. It must maintain a contrast with the neighborhood in order for the government to thoroughly investigate each location. As a result, providing the government with the necessary support can be a pretty casual affair for the business. As a result, a better outcome for society and the country’s economic standard will be achieved. The company has connections in several parts of the community. In order to formulate proper policies, the government frequently requires technical, economic, financial, or political inputs. Various firms and groups can assist the government in gathering the necessary information. Any activity that is based on correct data has a better probability of succeeding. For example, the government likes to know the elasticity of demand for a commodity before imposing a tax on it.
h) Foreign Exchange Earnings:
Foreign Exchange Earnings are the monetary gains generated from the sale of goods and services, as well as the exchange of currencies on international markets. The government anticipates that the company will generate foreign currency by exporting goods to other countries. This word also refers to a company’s responsibility to the government. To generate foreign currency, large-scale firms, in particular, should engage in export trade. Import and export norms and regulations must be followed by businesses. The United States of America’s official currency is the world’s most traded currency. The US Dollar is used to price many of the world’s most precious commodities. Businesses will have to pay greater rates for these resources if a country’s currency is weak against the US dollar. As a result, they will be forced to charge a greater price for your product/service, reducing your competitive advantage. For companies that export commodities and import raw materials, the exchange rate will be critical.
i) Political Constancy:
Another fundamental responsibility of business towards the government is political stability, which is critical for business environments. Economic development, national security, and political stability are all essential for progress. In a democratic environment, a well-established government always offers more returns and tranquility. Business units should avoid collaborating with or supporting people who are responsible for causing political unrest. Political instability in a country has an impact on commercial operations. This is especially true for businesses that operate on a global scale. Economic development and political stability are inextricably linked. Government collapse and political upheaval could result from poor economic performance. Political stability is a term that has a long history in human history. Autocracies with a long history of political stability or democracies that are still developing. Not all forms of political stability are equally conducive to growth; much relies on how well stability translates into good governance.
j) Assistance in the Implementation of Socioeconomic Policies:
The government expects business sector cooperation and assistance in putting social and economic development programs and strategies into action. Business has an impact on the economy, employment, environment, household, and government. Income, education, employment, community safety, and the development of social support services are all aspects of social and economic development for rural residents. These criteria will determine which types of businesses should be introduced into the market in the near future, as well as the country’s economic development.
k) Providing advice to the government:
The business organization must provide timely advice to the government when it comes to the formulation of critical policies like the Industrial Policy, Import, and Export Policy, and Licensing Policy, among others. Because businesses are the primary source of jobs, innovation, and social-economic well-being, the government should encourage them and incentivize their performance and investment. This can be done through grants, tax credits, and other means.
l) Making a contribution to the government’s coffers:
The government is always concerned about local businesses. As a result, the government assists firms in staying afloat in the local market when necessary. On the other side, the government may encounter a variety of issues, emergencies, and natural disasters such as floods and earthquakes. As a result, during such time, the business organization must provide funds to the government.
m) Adhere to Environmental Regulations:
Many businesses, particularly those in the industrial and manufacturing sectors, are subject to stringent regulations governing the number and type of pollutants they are permitted to emit. Some businesses, motivated by a sense of “social responsibility” to the greater good, may seek to limit their pollution more stringently than the law requires. Businesses are solely concerned with profit, with no regard for the environment. According to the financial survey, approximately 91 percent of global customers expect businesses to be socially and environmentally responsible. It is unforgivable to harm the environment for financial gain. In this situation, adopting CSR identifies me as a business operator who is willing to go above and beyond by taking into account social and environmental factors. Businesses should make changes in their business sectors, particularly in production, to conserve the environment and fulfill their ethical responsibility to the government. Small steps toward sustainability, such as using less or more environmentally friendly packaging, can help to reduce production costs.
To sum up, we can see most importantly ensuring the true judgment of law, not only for business also for education, and research, for maintaining a sound environment as well, maintaining socio-economic policies, maintaining a comfort zone with political condition of the country, for foreign affairs, for fulfilling social responsibilities, tax consideration, and tax benefits, and for many more reasons a business need to follow rules, regulations towards the government. As Klaus Schwab (a Famous German engineer and economist) once said, “Corporate social responsibility is measured in terms of businesses improving conditions for their employees, shareholders, communities, and environment. But moral responsibility goes further, reflecting the need for corporations to address fundamental ethical issues such as inclusion, dignity, and equality.”
We have covered are these 13 responsibilities and we can say are good to go. Now we need your judgments. Do these responsibilities apply to both small business and big businesses in the same manner? Do you need to follow responsibilities if you are dreaming to start a small business in a country?