Is the process by which the sovereign, through its lawmaking body raises revenues used to defray expenses of government. Means of the government in increasing its revenue under the authority of the law purposely used to promote welfare and protection of its citizenry.

1. CONCEPT OF
TAXATION

2. TAXATION
Is the process by which the sovereign,
through its lawmaking body raises revenues
used to defray expenses of government.
Means of the government in increasing its
revenue under the authority of the law,
purposely used to promote welfare and
protection of its citizenry.
Collection of a share of individual and
organizational income by a government
under the authority of the law.

3. is a means of raising
funds for the operations
of the government,
especially its public
services

4. WHAT IS A GOOD TAX
SYSTEM?
The canons of a good
tax system according to
Adam Smith are: equity,
certainty, convenience
and economy.

5. REQUIREMENTS OF A GOOD TAX
SYSTEM:
The distribution of the tax burden should
be equitable or fair.
Taxes should not ruin an efficient market
system.
Taxes should serve as tools in facilitating
economic stability and economic
growth.
Tax administration should be efficient.
The cost of tax administration and its
compliance should be economical.

7. The primary purpose of taxation is to
generate funds/ revenues used to
defray expenses incurred by the
government in promoting the general
welfare of its citizenry.
In most nations, especially our country,
taxes are the major source of
government income. Others come from
borrowing, sale of public lands and
other government properties, and
interests on investments. This

8. Other purposes of taxation
include:
1.To equitably contribute to
the wealth of the nation;
2.To protect new industries
3.To protect local producers

9. ESSENTIAL
CHARACTERISTICS
OF TAX

10. The following are the essential
characteristics of tax:
1. It is enforced contribution.
2. It is generally payable in cash.
3. It is proportionate in character.
4. It is levied on person or property.
5. It is levied by the State which has
jurisdiction over the person or property.
6. It is levied by the lawmaking body of the
state.
7. It is levied for public purposes.

11. PRINCIPLES AND THEORIES OF TAXATION
The Benefit Principle- This
principle holds the individuals
should be taxed in proportion
to the benefits they receive
from the governments and that
taxes should be paid by those
people who receive the direct
benefit of the government
programs and projects out of
the taxes paid.

12. THE ABILITY-TO-PAY PRINCIPLE-
This principle holds that taxes should
relate with the people's income or the
ability to pay, that is, people with
greater income or wealth and can
afford to pay more taxes should be
taxed at a higher rate than people with
less wealth. An example is Individual
income tax.

13. THE EQUAL DISTRIBUTION PRINCIPLE-
This principle states that income,
wealth, and transaction should
be taxed at a fixed percentage;
that is, people who earn more
and buy more should pay more
taxes, but will not pay a higher
rate of taxes.

14. STRUCTURES OF TAXATION
PROPORTIONAL- The
government takes an
amount of money from a
person which is in
proportion to his/ her
income.

15. REGRESSIVE
-government takes a larger
percentage of a person’s
income for tax, while he
is receiving a lower
income.

16. PROGRESSIVE
government takes a
larger percentage of
his salary for tax due
to his high income.

18. A SOUND TAX SYSTEM HAS THE
FOLLOWING BASIC PRINCIPLES:
1.Fiscal Adequacy
2.Equality or Theoretical Justice
3.Administrative Feasibility
4.Consistency or Compatibility
with Economic Goals

19. FISCAL ADEQUACY
It means that the sources of
revenue taken as a whole should be
sufficient to meet the expanding
expenditures of the government
regardless of business conditions,
export, taxes, trade balances, and
problems of economic adjustment.

20. EQUALITY OR THEORETICAL JUSTICE
It means that taxes levied must
be based upon the ability of the
citizen to pay. Justice and
equality are vague terms . They
are furthermore relative to
popular concepts of justice
which prevails at any time and
place.

21. ADMINISTRATIVE FEASIBILITY
This principle connotes that in a
successful tax system, such tax
should be clear and plain to
taxpayers, capable of enforcement
by an adequate and well-trained
staff of public office, convenient as
to the time and manner of payment,
and not unduly burdensome upon
or discouraging to business
activity.

22. CONSISTENCY OR COMPATIBILITY WITH
ECONOMIC GOALS
This refers to the tax laws that
should be consistent with
economic goals or programs of
the government. These
economic goals are the basic
services intended for the
masses.

23. CLASSIFICATION OF TAXES
As to subject matter
1. Personal, Poll, or Capital Tax. This tax
means that there is a fixed amount upon all
persons residing within a specified
territory without regard to their property or
the occupation in which they may be
engaged.
Example: Residence Tax

24. 2. Property Tax. This tax refers to one
assessed on all property located within a
certain territory on a specified date in
proportion to its value, or in accordance
with some other reasonable methods of
appointment, the obligation to pay which
is absolute and unavoidable and is not
based upon any voluntary action of an
individual’s assessment.
Example: Real State Tax

25. 3. Excise Tax. This refers to any tax
which does not fall within the
classification of a poll tax or a
property tax and embraces every
form of burden not laid directly
upon person or property.
Example: Value-added tax (VAT)

26. As to who bears the burden
1.Direct tax. This tax refers to a
tax which is demanded from an
individual who tends to buy or
purchase a good or service.
Example: Income tax

27. 2. Indirect tax. This refers to a tax
paid primarily by a person who shift
the burden upon someone else, or
who is under no legal obligation to
pay him/her.
Example: Buying of goods and
services (VAT)

28. As to determination of account
1.Specific tax. This tax is a fixed or
determinate sum imposed by the
head or number or some standard
of weight or measurement, and
requires no assessment beyond a
listing and classification of the
object to be taxed.
Example: Taxes on wines

29. 2. Ad Valorem Tax. It is a tax of a fixed
proportion of the value of the property
with respect to which the tax is assessed
, and requires the intervention of
assessors or appraisers to estimate the
value of such property before the
amount due from each taxpayer can be
determined.
Example: Tax according to value such as
Real Estate Tax

30. As to purpose
1.General tax. It refers to a tax levied to an
individual for a general public purpose.
Almost all taxes are an example of this
classification.
2.Special tax. This is a tax levied to an
individual for a particular or specific
purpose.

31.  As to scope
1. National tax. This tax is imposed by the state
itself and is effective within the entire
jurisdiction thereof.
Example: is the national revenue taxes.
2. Local tax. This tax is imposed by a political
subdivision of the state and is effective only
within the territorial boundaries thereof.

32. CRITICISMS AGAINST OUR
TAX SYSTEM
Real burden of taxation falls on
the poor
Dominant indirect taxes
Unrealistic tax exemptions
Poor are more honest in paying
their taxes