The function of financial management and its financial managers must understand tax regulations because:
- businesses want to minimize taxes
- they must consider the tax implications of major decisions
What is tax regulation?
Tax regulation means laws, guidelines or prospective tax laws with tax impact or revenue reduction impact on the firm financials.
The financial managers need to understand taxes as well its different types because they are also saddled with the responsibility of keeping taxes as minimum as possible in order to maximize the profit or the bottom-line of the company
Also, they need to consider the tax impact of major financing, investing or dividend decisions so as to ensure the performance of the keeping by a way of increasing shareholders' value is not sacrificed.
In essence, the finance managers must keep an eye on tax laws because the taxes must be keep at the minimum and also there is a need to consider taxes on major company's future decisions
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