Revenue-based tax model

The revenue-based tax model is a fiscal approach where taxes are calculated based on a company's earnings rather than on its profits. Under this model, the tax liability is directly linked to the revenue generated by the business, making it a straightforward and transparent method of taxation. This model simplifies the tax calculation process and can be particularly advantageous for governments seeking steady revenue streams, regardless of a company’s profit margins. It emphasizes the importance of gross earnings as a metric for tax purposes, providing an alternative to profit-based tax systems that often involve more complex deductions and allowances.