 DEFINITION OF TAXATION  It is the process by which the sovereign, through its lawmaking body,

raises revenues used to defray expenses of government  It is a way of the government in increasing
its revenue under the authority of the law, purposely used to promote welfare and protection of its
citizenry  It is the collection of a share of individual and organizational income by a government
under the authority of the law
 3. CONCEPT OF TAXATION  Taxation is the inherent power of the state to impose and demand
contribution upon persons, properties, or rights for the purposes of generating revenues for public
purposes. This power is legislative in nature and is essential to the existence of any independent
government.
 4. PRINCIPLES AND THEORIES OF TAXATION  The Benefit Principle. This principle holds that
individuals should be taxed in proportion to the benefit they receive from the government.
 5. PRINCIPLES AND THEORIES OF TAXATION  The Ability-To-Pay Principle. This principle holds that
taxes should relate with the people’s income or ability to pay.
 6. PRINCIPLES AND THEORIES OF TAXATION  The Equal Distribution Principle. The principle holds
that income, wealth, and transaction should be taxed at fixed percentage.
 7. STRUCTURES OF A TAX SYSTEM  A tax is proportional. A proportional tax means that the
government takes an amount of money from a person which is in proportion to his/her income.