Taxation

Concept and Purpose of Taxation

• Taxation is the inherent power of the State exercised by the legislature to demand enforced contributions from the people to raise revenue in order to defray the necessary expenses of the Government.
• The power to tax is an inherent attribute of sovereignty, anchoring on its "social contract” with its citizens obliging it to promote public interest and common good.
• Taxes can be imposed even in the absence of a constitutional provision, and the state can select the object and subject matter of taxation, making it unlimited.
• Taxation is not subject to set-off, except when both debts are due and demandable and have been fully liquidated.
• The power to tax is essentially a legislative function and cannot be delegated to other branches, except for permissive delegation of the power to tax to local governments, the President, and administrative regulations.
• The primary purpose of taxation is revenue, while secondary purposes include redistribution, repricing, and representation.
• Taxation can also have non-revenue raising, sumptuary purposes such as regulation, promotion of general welfare, reduction of social inequalities, and encouraging economic growth.
• A license is in the nature of a special privilege or authority to do what is within its terms, granted by the State and always revocable.
• A toll is a sum of money paid for the use of something, generally applied to the use of a road, bridge, or the like, of a public nature.
• Compromise penalty is the amount collected by the BIR in lieu of criminal prosecution for violations committed by taxpayers.
• Special assessment is a charge imposed on lands especially benefited by public works or improvements financed by the government, not a personal liability of the person assessed, and based wholly on benefits and not necessity.
• Taxes and debts cannot be the subject of compensation because the government and the taxpayer are not mutually creditors and debtors of each other, and a claim for taxes is not a debt, demand contract, or judgment allowed to be set off.

Concept and Purpose of Taxation

• Taxation is the inherent power of the State exercised by the legislature to demand enforced contributions from the people to raise revenue in order to defray the necessary expenses of the Government.
• The power to tax is an inherent attribute of sovereignty, anchoring on its "social contract” with its citizens obliging it to promote public interest and common good.
• Taxes can be imposed even in the absence of a constitutional provision, and the state can select the object and subject matter of taxation, making it unlimited.
• Taxation is not subject to set-off, except when both debts are due and demandable and have been fully liquidated.
• The power to tax is essentially a legislative function and cannot be delegated to other branches, except for permissive delegation of the power to tax to local governments, the President, and administrative regulations.
• The primary purpose of taxation is revenue, while secondary purposes include redistribution, repricing, and representation.
• Taxation can also have non-revenue raising, sumptuary purposes such as regulation, promotion of general welfare, reduction of social inequalities, and encouraging economic growth.
• A license is in the nature of a special privilege or authority to do what is within its terms, granted by the State and always revocable.
• A toll is a sum of money paid for the use of something, generally applied to the use of a road, bridge, or the like, of a public nature.
• Compromise penalty is the amount collected by the BIR in lieu of criminal prosecution for violations committed by taxpayers.
• Special assessment is a charge imposed on lands especially benefited by public works or improvements financed by the government, not a personal liability of the person assessed, and based wholly on benefits and not necessity.
• Taxes and debts cannot be the subject of compensation because the government and the taxpayer are not mutually creditors and debtors of each other, and a claim for taxes is not a debt, demand contract, or judgment allowed to be set off.

Test your knowledge on the concept and purpose of taxation with this informative quiz. Explore the fundamental principles of taxation, its relation to government sovereignty, and the different types of taxes that exist. Challenge yourself with questions on the primary and secondary purposes of taxation, and learn about the non-revenue raising purposes that taxation can serve. Additionally, this quiz covers topics such as licenses, tolls, compromise penalties, and special assessments. Sharpen your understanding of taxation and its significance in modern society with this engaging quiz