PH TAXATION

IN FOCUS
Taxes as Source of Government
Revenue & Types of Taxes

2
 “Taxation is central to the existence
and functioning of a nation, as well
as to the functioning of its lower
levels of government”
-Marcus Tullius Cicero

3
TAXATION
The process or means by which the sovereign,
through its lawmaking body, raises income to
defray the necessary expenses of the government.

It is a power by which an independent state,

through its lawmaking body, raises and
accumulates revenue from its inhabitants to pay
the necessary expenses of the government.

4
Sources of funds
 Revenues from both tax and non-tax
sources;
 Borrowings from both domestic and
foreign sources;
 Withdrawals from available cash
balances

5
Purpose of Taxation
PRIMARY:

To provide funds or property with which

to promote the general welfare of its
citizens and to enable it to finance it
multifarious activities.

6
Purpose of Taxation
SECONDARY:

 To strengthen anemic enterprises by giving

tax exemptions
 To protect local industries against foreign
competition through imposition of high
custom duties on imported goods.

7
Purpose of Taxation
SECONDARY:

 To reduce inequalities in wealth and income

by imposing progressively higher taxes.
 To prevent inflation by increasing taxes or
ward off depression by decreasing taxes.

8
Theory
 The existence of the government is a
necessity.
 The government cannot continue without a
means to pay its expenses.
 The government has the right to compel its
citizens and property within its limits to
contribute.

9
Basis
 Taxation is based on the reciprocal
duties of protection and support
between the government and its
people.

10
Nature of Taxation
 Itis inherent in sovereignty.
 Legislative in character.
 Subject to constitutional and
inherent limitations.

11
Aspect of Taxation
LEVY – deals with the provision of law which
determines
 The person or property to be taxed
 The sum or sums to be raised
 The tax rate
COLLECTION – prescribe the manner of enforcing the
obligation on the part of those taxes to pay the
demand thus created.

12
TYPES OF TAXES

13
14
National Taxes Local Taxes
 Capital Gains Tax  Tax on transfer of real
 Documentary Stamp Tax property ownership.
 Donor’s Tax  Franchise Tax
 Estate Tax  Professional Tax
 Income Tax  Amusement Tax
 Value Added Tax
 Excise Tax

15