Green Finance and Natural Capital in regards to Tax Assessment

Abstract

The purpose of the research is to point out the importance of Green Finance and Natural Capital and apply such concepts to the method of national budget calculation and tax assessment. This article employs the method of studying related literature, in regards to Green Finance and NaturalCapital, in conducting the research. The data has been collected secondarily and the result shall be presented in a descriptive form. The findings of this show that, first, Green Finance or Environmental Finance is a concept that is about investments that relate to the environment. The definition of Green Finance is crucial because having a clear definition would attract more investors and investments(to the Country) since the investor will be able to know what they are investing in and estimate their return on investment. Moreover, a clear definition of Green Finance will enable the Government to initiate a clear public policy that shall better protect the environment and its resources as a whole; second,Natural Capital which means capital, both biotic and abiotic, that stems from Mother Nature, is hard to calculate its valuation due to the fact that Natural Capital can be hard to see directly. However, if nature is speculated closely, it can be seen that its capital can be calculated from the amount one would need to pay if such natural resource has disappeared or the value that one is willing to pay to enjoy such natural resource, thus, allowing us to better calculate the value of Natural Capital and even reflect such value on products or other goods that human consume daily. With that said, realizing the concept of Natural Capital may enable tax assessments and national budget calculations to be more accurate in terms of reflecting the true value of such goods which could be better than assessing the value of goods and consumption based on their price at the point of sale or at the point of transaction. Therefore, Green Finance and Natural Capital can lead to creating more income for the Government by taking Natural Capital into account when assessing each type of tax, these additional income shall then be used for public affairs and services.