The primary purpose of taxation is to raise revenue to meet huge public expenditure. Most governmental activities must be financed by taxation. But it is not the only goal. In other words, taxation policy has some non-revenue objectives.
Explaining the Primary Purpose of Taxation. Taxation is a means by which governments finance their expenditure by imposing charges on citizens and corporate entities. The main purpose of taxation is to accumulate funds for the functioning of the government machineries.
They describe ways that a tax applies to the person or group being taxed.
- Progressive taxes.
- Regressive taxes.
- Proportional and flat taxes.
- Federal income tax.
- State and local income taxes.
- FICA and other payroll taxes.
- Self-employment taxes.
- Capital gains taxes.
Taxation is a means by which governments finance their expenditure by imposing charges on citizens and corporate entities. The main purpose of taxation is to accumulate funds for the functioning of the government machineries.
In general, taxes fall into one of four primary categories. Income taxes are imposed on the income earned by a person or firm; property taxes are imposed on assets; sales taxes are imposed on the value of goods sold; and excise taxes are imposed on specific goods or services.
Taxation is a system by which a government levies or imposes charges on citizens and corporate entities to finance it's expenses such as defense,welfare (Education,Health Care,Infrastructure) etc. Tax is a compulsory payment to government under any law.It can be charged by government on goods,income or any activity.
The primary purpose of taxation is to raise revenue to meet huge public expenditure. Most governmental activities must be financed by taxation. But it is not the only goal. In other words, taxation policy has some non-revenue objectives.
Concept, Nature and Characteristics of Taxation and Taxes. Meaning of Taxation Taxation is the inherent power of the state, acting through the legislature, to impose and collect revenues to support the government and its recognized objects.
Theory and basis of taxation
The power of taxation proceeds upon the theory that the existence of government is a necessity; that it cannot continue without means to pay its expenses; and that for these means, it has a right to compel all its citizens and property within its limits to contribute.Taxes are "the lifeblood of government." These are used to finance basic services such as education and health care as well as infrastructure – all vital to the economy's growth and improvement of Filipinos' lives. Rules and regulations on tax collections are specified in the Tax Reform Act of 1997.
Section 5. Each local government unit shall have the power to create its own sources of revenues and to levy taxes, fees, and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy.
The life blood theory constitutes the theory of taxation, which provides that the existence of government is a necessity; that government cannot continue without means to pay its expenses; and that for these means it has a right to compel its citizens and property within its limits to contribute.
It is an enforced contribution. It's payment not voluntary in nature, and the imposition is not dependent upon the will of the person taxed. Payment of taxes must be based on the “ability-to-pay” principle; thus, the higher the income of the taxpayer, the bigger the amount of the tax paid.
One way of passing the burden of the tax from one person to other (Black's Law Dictionary ,supra ). For Example, taxes paid by the manufacturer may be shifted to the consumer by adding the amount of the tax paid to the price of the product.
LIFEBLOOD DOCTRINCE. The lifeblood theory constitutes the theory of taxation, which provides that the existence of government is a necessity; that government cannot continue without means to pay its expenses; and that for these means it has a right to compel its citizens and property within its limits to contribute.
The term "tax administration" means: a. the administration, management, conduct, direction, and supervision of the execution and application of the internal revenue laws or related statutes (or equivalent laws and statutes of a State) and tax conventions to which the United States is a party; and. b.
Taxes are "the lifeblood of government." These are used to finance basic services such as education and health care as well as infrastructure – all vital to the economy's growth and improvement of Filipinos' lives. Rules and regulations on tax collections are specified in the Tax Reform Act of 1997.
In the United States, the historical favorite is the progressive tax. Progressive tax systems have tiered tax rates that charge higher income individuals higher percentages of their income and offer the lowest rates to those with the lowest incomes. Flat tax plans generally assign one tax rate to all taxpayers.
Main features of tax - definition
The main characteristic features of a tax are as follows: (1) A tax is a compulsory payment to be paid by the citizens who are liable to pay it. Hence, refusal to pay a tax is a punishable offence. (2) There is no direct quid-pro-quo between the tax payers and the public authority.The two central principles of taxation relate to the impact of tax on efficiency concerned with the allocation of resources) and equity (concerned with the distribution of income). As the major principles of taxation in any system, it is worth taking an in-depth look at “efficiency” and “equity (fairness)”.
Benefit principle. The benefit principle is a concept in the theory of taxation from public finance. It bases taxes to pay for public-goods expenditures on a politically-revealed willingness to pay for benefits received. The principle is sometimes likened to the function of prices in allocating private goods.
Canons of taxation refer to the administrative aspects of a tax. They relate to the rate, amount, method of levy and collection of a tax. In other words, the characteristics or qualities which a good tax should possess are described as canons of taxation.
| Income Tax Slabs | Income Tax Rates |
|---|
| Income greater than Rs 2.5 lakhs but less than Rs 5 lakhs | 5% of the amount exceeding Rs 2.5 lakhs |
| Income greater than Rs 5 lakhs but less than Rs 10 lakhs | Rs.12,500+20% of the amount exceeding Rs 5 lakhs |
| Income greater than Rs 10 lakhs | Rs.1,12,500+30% of the amount exceeding Rs 10 lakhs |
The canons of a good tax system according to Adam Smith are: equity, certainty, convenience and economy.
