Taxation is the process
by which the sovereign, through its lawmaking body, raises income to defray the
necessary expenses of the government.
It also refers to the inherent
power of the state to demand contributions to finance public expenditures.
Tax is the enforced
proportional contributions from persons and property levied by the lawmaking
body of the state by virtue of its sovereignty for the support of the
government and all public needs.
Characteristics of tax
1. It is an enforced contribution
2. It is generally payable in money
3. It is levied on persons or property
4. It is proportionate in character
5. It is levied by the lawmaking body of the state
6.
It is levied by the state upon persons or
property under its jurisdiction
Classification of taxes
A. According to subject
matter or object
1. Personal, poll or capitation- tax of fixed amount imposed on persons residing within a specified territory, whether citizens or not without regard to their property or occupation or business.
Community tax (residence tax)
2. Property – tax imposed on property whether real or personal in proportion to its value.
3. Excise – any tax than
does not belong to the classification of a poll or property tax. It is a charge
imposed upon the performance of an act, the enjoyment of a privilege or the
engaging in an occupation.
B. As to who bears the burden
1. Direct – directly demanded from and paid by the taxpayer.
2.
Indirect –
demanded form one person in the expectation and intention that he shall
indemnify himself at the expense of another.
C. As to the determination of amount
1. Specific – tax of a fixed amount imposed by the head or number, or by some standard or weight or measurement.
2. Ad valorem – tax of
fixed proportion of the value of property with respect to which the tax is
assessed.
D. As to purpose
1. General, fiscal or revenue – tax imposed for general governmental purposes and expenditures.
2. Special or regulatory
– tax imposed for a special purpose
E. As to scope
1. National – tax imposed by the national government.
2.
Municipal
or local – tax imposed by local government units.
F. As graduation or rate
1. Proportional – tax which is based on a fixed percentage vis-à-vis the amount of the property or other bases to be taxed.
2. Progressive or graduated – the tax rate increases as the tax base increases.
3.
Regressive
– the tax rate decreases as the tax base increases.