TAX1 Introduction to taxation PDF
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This document provides an introduction to taxation, covering key concepts such as state power, taxation theory, and the basis of taxation. It delves into cost allocation theories, including the benefit received theory. The document also explores the implications of taxation, the inherent powers of the state, and limitations of taxation, providing a comprehensive overview of the subject.
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**TAX 1 (INTRODUCTION TO TAXATION)** ***WHAT IS TAXATION?*** - - - **The Theory of Taxation** Every government provides a vast array of public services including defense, public order and safety, health, education, and social protection among others. A government cannot exist without a *...
**TAX 1 (INTRODUCTION TO TAXATION)** ***WHAT IS TAXATION?*** - - - **The Theory of Taxation** Every government provides a vast array of public services including defense, public order and safety, health, education, and social protection among others. A government cannot exist without a **system of funding**. The government's necessity for funding is the *theory of taxation*. **The Basis of Taxation** - **THE THEORIES OF COST ALLOCATION** **Benefit received theory** - **Ability to pay theory** - **ASPECTS OF THE ABILITY TO PAY THEORY** **Vertical Equity** - **Horizontal Equity** - **The Lifeblood Doctrine** - - **Implication of the lifeblood doctrine of taxation** 1. 2. 3. 4. **The inherent powers of the state** 1. 2. 3.  **Similarities** 1. 2. 3. 4. 5. **SCOPE OF THE TAXATION POWER** **C- Comprehensive** **U- Unlimited** **P- Plenary** **S- Supreme** **THE LIMITATIONS OF THE TAXATION POWER** 1. - 1. 2. - 1. 2. - - - 2. - 1. 2. - - - - - - - - - - 1. - 2. - - 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 6. 7. 8. 9. **Vague tax laws** (construed against the government and in favor of the taxpayer\'s). **Vague exemption laws** (construed against the taxpayer and in favor of the government). **Double taxation** (occurs when the same taxpayer is taxed twice by the same tax jurisdiction for the same thing). Elements of double taxation 1. 2. a. b. c. d. **Type of double taxation** 1. Ex. An income tax of 10% on monthly sales and a 2% income tax in the annual sales (total of monthly sales). \[Same primary and same secondary\] 2. A. B. C. D. **Escapes from taxation** - are the means available to the taxpayer to limit or even avoid the impact of taxation. **Categories of Escapes from Taxation** A. 1. 2. 3. ***B. Those that [do not result to loss] of government revenue*** 1. 2. 3. **Forms of Shifting** a. b. c. Shifting is common with business taxes where taxes imposed on business revenue can be shifted or passed on to customers. **Tax Amnesty** - **Tax Condonation** - **Tax amnesty vs. Tax condonation** Amnesty covers both civil and criminal liabilities, but condonation covers only civil liabilities of the taxpayer. Amnesty operates retrospectively by forgiving past violations. Condonation applies prospectively to any unpaid balance of the tax; hence, the portion already paid by the taxpayer will not be refunded. Amnesty is also conditional upon the taxpayer paying the government a portion of the tax whereas Condonation requires no payment.
