How are businesses normally taxed?

Businesses are typically taxed on a current year basis on their profits for a 12-month period, which aligns with option C. This means that the taxable profit is determined based on the business's financial results during the fiscal year, allowing for a clear and systematic assessment of income generated.

This method aligns with accounting principles where profits are recognized when earned, providing a practical structure for tax assessment. It allows tax authorities to evaluate a business's performance over a consistent reporting period, facilitating a fair calculation of tax owed based on actual earnings rather than estimates.

The other options present various alternative methods that do not align with the general practice of annual taxation. For example, monthly or quarterly taxation based on current or projected earnings introduces complexities in forecasting profits and does not reflect a comprehensive annual assessment of profitability. Taxing on estimated income for the next year would not support the need for accurate profit measurement, as it would rely on projections that could vary significantly from actual results. Thus, the method chosen in option C is the standard for taxing businesses and supports stable revenue collection for governments based on actual economic activity.