Tax Distinguished From Other Fees

Tax distinguished from other fees. IMPT

1. From TOLL. Toll is a sum of money for the use of something, generally applied to the consideration which is paid for the use of a road, bridge or the like, of a public nature.

A toll is a demand of proprietorship, is paid for the use of another’s property and may be imposed by the government or private individuals or entities; while a tax is a demand of sovereignty, is paid for the support of the government and may be imposed only by the State.

2. From PENALTY. Penalty is any sanction imposed as a punishment for violation of law or acts deemed injurious. Violation of tax laws may give rise to imposition of penalty.

A penalty is designed to regulate conduct and may be imposed by the government or private individuals or entities. Tax, on the other hand, is primarily aimed at raising revenue and may be imposed only by the government.

3. From SPECIAL ASSESSMENT. Special Assessment is an enforced proportional contribution from owners of lands for special benefits resulting from public improvements.

Special Assessment is levied only on land, is not a personal liability of the person assessed, is based wholly on benefits and is exceptional both as to time and place. Tax is levied on persons, property, or exercise of privilege, which may be made a personal liability of the person assessed, is based on necessity and is of general application.

4. From PERMIT or LICENSE FEE. Permit or License Fee is a charge imposed under the police power for purposes or regulation.

License fee is imposed for regulation and involves the exercise of police power while tax is levied for revenue and involves the exercise of the taxing power. Failure to pay a license gee makes an act or a business illegal, while failure to pay a tax does not necessarily make an act or a business illegal.

5. From DEBT. Debt is generally based on contract, is assignable and may be paid in kind while a tax is based on law, cannot generally be assigned and is generally payable in money. A person cannot be imprisoned for non-payment of debt while he can be for non-payment of tax except poll tax.

A tax is considered a debt for purposes of remedies for its enforcement;

6. From REVENUE. Revenue is broader that tax since it refers to all funds or income derived by the government taxes included. Other sources of revenues are government services, income from public enterprises and foreign loans.

7. From CUSTOM DUTIES. Custom duties are taxes imposed on goods exported from or imported to a country. Custom duties are actually taxes but the latter is broader in scope.