Taxation Flashcards
(41 cards)
- The power of the sovereign to impose burdens or charges upon
persons, property, or property rights. - Intended for the use and support of the government to enable it
to discharge its functions.
Taxation
- A compulsory contribution to the government’s revenue.
- Levied by the government on workers’ income, business profits,
properties, and property rights. - May also be added to the cost of goods, services, and
transactions
Tax
a body of rules passed by the legislature, enabling
the government to acquire a claim or property as a legal duty or
obligation by operation of law
tax law
Nature of Taxation Power that
- Belongs as a matter of right to every independent government
without needing to be conferred by the people.
Inherent
The power of taxation is an essential and inherent attribute of
sovereignty.
- the sustenance of government requires
contributions from the citizens.
Inherent
Nature of Taxation Power that
- exercise of the high act of sovereignty, performed by the
legislature based on policy, necessity, and public welfare.
- e has the sole power to prescribe the means of tax
collection and to designate the officers responsible for its
enforcement.
Legistative
The power of taxation is legislative in character, as only the
legislature can create tax laws.
Legistative
- raise revenues for public needs,
enabling people to live in a civilized society - increased to stabilize prices and stimulate
greater production - mobilize capital to be directed into capital-deficient fields
of business - instrument of fiscal policy, influencing the
direction and structure of money supply, prices, and the national
economy
purposes of TAXATION
5 Inherent Limitations of the Power of Taxation
- Limitation of Public Purpose
- Limitation of Territorial Jurisdiction
- Limitation of Double Taxation
- Limitation of Non-Delegation of Taxing Power
- Limitation of Exemption of Government Agency or
Instrumentality
3 Basic Principles of Taxation
- Fiscal Adequacy
- Equality or Theoretical Justice
- Administrative Feasibility
Principle of taxation where:
The source of revenue as a whole must be sufficient to meet
expanding governmental expenses, regardless of business
conditions, export taxes, trade balances, and economic
adjustment problems
Fiscal Adequacy
Principle of taxation where:
Revenues must be based on the taxpayer’s ability to pay
Equality or Theoretical Justice
Principle of taxation where:
The tax system must be clear to taxpayers, enforceable,
convenient, and not burdensome or discouraging to business
activity.
Administrative Feasibility
Essential Characteristics of Taxes
- It is an enforced contribution
- It is exacted pursuant to legislative authority
- It is contribution in money
- It is levied upon person, property and property rights
- It is for the purpose of raising revenue
- It must be for public purpose
- It must be proportionate in character
6 Classification of Taxes
- According to Purpose
- According to Object
- According to Subject
- According to Determination of Amount
- According to Authority Imposing the Tax
- According to Rate
Fiscal Taxes and Regulatory Taxes
According to Purpose
Personal, Captivation or Poll Tax
Property Taxes
Excise Tax
According to Object
Direct Tax and Indirect Tax
According to Subject
Specific Tax and Ad Valorem Tax
According to Determination of Amount
National Taxes and Municipal Tax
According to Authority Imposing the Tax
Proportional Tax and Progressive Tax
According to Rate
- Designed to raise revenues for governmental needs.
- Example: Percentage tax on locally manufactured commodities.
Fiscal Taxes
- Designed to achieve social and economic goals, regardless of
revenue raised. - Example: Protective tariff or customs duties.
Regulatory Taxes
- Imposed on individuals without regard to property or occupation.
- Example: Residence tax.
Personal, Captivation or Poll Tax
