Sunday, June 21, 2009

Aspects of Taxation/ Basic Principles of a Sound Tax System

ASPECTS OF TAXATION

1. Levying of the tax- The imposition of tax requires legislative intervention. In the Philippines, it is Congress that levies the tax;

2. Collection of the tax levied. This is essentially an administrative function.

The two processes together constitute the taxation system.


BASIC PRINCIPLES OF A SOUND TAX SYSTEM. (IMPT!)


1. Fiscal Adequacy- The sources (proceeds) of tax revenue should coincide with and approximate needs of government expenditures. The sources of revenue should be sufficient and elastic to meet the demands of public expenditures;

2. Theoretical Justice- The tax system should be fair to the average taxpayer and based upon his ability to pay.

3. Administrative Feasibility- The tax system should be capable of being properly and efficiently administered by the government and enforced with the least inconvenience to the taxpayer.

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