Final answer:
Tax evasion is a fraudulent act involving illegal nonpayment of taxes, which differs from tax avoidance, a legal method of reducing tax liability. Governments depend on tax revenue to provide services, and all members of society share the tax-paying responsibility. So, the correct answer is option a.
Step-by-step explanation:
Tax evasion is a fraudulent act involving illegal nonpayment of taxes. Tax evasion is different from tax planning, which is a legitimate way to minimize the amount of taxes paid by using the legal tax code to one's advantage. On the other hand, tax avoidance is the legal exploitation of the tax regime to one's advantage, to reduce the amount of tax that is payable by means that are within the law.
Both tax evasion and tax avoidance result in the nonpayment of taxes, but the key difference is legality. It is essential to understand this distinction, as tax evasion can lead to significant penalties, including fines and imprisonment, while tax avoidance is legal and widely practiced.
Governments rely on revenue from taxes to fund various programs and services. Without adequate revenue, a government would struggle to provide essential services to its citizens.
Taxes are also used to meet social objectives, such as reducing income inequality through progressive taxation. The responsibility to pay taxes is shared by all members of society to ensure the government can operate and provide necessary goods and services.