FISCAL ADMINISTRATION

TAXATION FOR
DEVELOPMENT
ALEXIS DE LEON
 TOPICS
I.THEORY AND CONCEPT OF TAXATION
REPORT OUTLINE
A.Definition and essential characteristics
B.Bases and purposes
C.Classification of taxes
II.DEVELOPMENT REQUIREMENTS AND
TAXATION
A.Capital formation
B.Redistribution of income and wealth
C.Allocation and resources
D. Economic stability
TAXATION
Inherent power of sovereign exercised
through legislature to impose burdens
upon subject and objects within its
jurisdiction for the purpose of raising
revenues to carryout legitimate objects
of the government.
TAXES
A TAXES – a compulsory
contribution from the person to the
government to defray the expenses
incurred in the common interest of all
without the reference to special
benefits conferred upon taxpayers.
 Theory
of Taxation
Theory Taxation(Adams Smith Canon of
Taxation)

EQUITY
CERTAINTY
CONVENIENCE
ECONOMY
EQUITY

Smith prescribes that taxes must be

Based on tax payers ability to pay as
measured by his size of income.
CERTAINTY

This second criterion specify tax

payers should know how which
subject they are subject to amount to
pay and the manner of payment.
CONVINIENCE

Smith third Canon take

convenience of the place ,time
manner of Payment.
ECONOMY

Tax administration according to

smith must not involve too much
expenses on the government.
 Essential
Characteristic
of Taxes
Essential Characteristic of Taxes
It is an enforced contribution
Generally payable in money
Proportional in character
It is levied on person or property
It is levied by the state that has jurisdiction over the person
and property.
It is levied by the lawmaking body of the state
It is levied for public purposes
It is commonly required to be paid at regular periods or
 Purpose
of
Taxation
Purpose of Taxation

I. Primary
 to provide funds or property with
which to promote general welfare and
protection of its citizen and to enable
it to finance its multifarious
activities .
Purpose of Taxation

II. Secondary
a) To protect the local industries through
imposition of costums duties.
b) To reduce inequalities in wealth and
income by adopting progressively
Purpose of Taxation
II. Secondary
c. To prevent inflation or ward of
depression by increasing or decreasing
respectively.
d. To promote and protect some
enterprise or industry by giving tax
exemptions and tax incentives.
Classification
of
Taxes
Classification of Taxes
Taxes may be classified
 as to subject matter
 as to purpose
 as to scope of the tax
 as to determination of amount
 as to who bear as the burden
 as to graduation or rate
Classification of Taxes
As to subject matter or object
a) Personal, Poll or Capitation tax-residence of specified territory.
Ex.Community Tax
b) Property Tax-real or personal property tax.Ex.Real Property
Tax.
c) Excise Tax-enjoyment of a privilege.Ex.Professional Tax
Classification of Taxes
As to purpose
a) General or Fiscal Revenue-raising public funds
Ex: Income Tax
b) Special or Regular Tax-regulate or control
Ex.Sin Tax
Classification of Taxes
As to scope of the tax
A.National Tax-national government
Ex.Internal Revenue Taxes.
B.Municipal or Local Tax-local government
Ex:Real Property Tax
Classification of Taxes
As to determination of Amount
a.Specific Tax-fixed amount based on numbers weights
and other.
Ex: Sin Tax
b.Ad Valorem Tax-latin term”according to value
”(Assessment)
Classification of Taxes

As to who bears the burden

a.Direct Tax-paid by the one who bears the burden.
Ex:Donors Tax
b.Indirect Tax-can be shifted to another
Ex.Value Added Tax
Classification of Taxes

As to graduation or rate
a) Proportional tax-Fixed percentage Ex.VAT-12%
b) Progressive or graduated Tax-increasing
percentage
c) Regressive Tax
Development
.

Requirements
Taxation
Development Requirement of Taxation

1. The generation of capital and savings necessary for economic

growth.
2. The reduction of inequalities in income and wealth for social
justice and equity.
3. The proper allocation and utilization of resources.
4. The protection of the exposed economy from external forces
so attain stability and unimpeded economic growth.
CAPITAL
FORMATION
Is considered as the main key to
economic development . In LDCs
taxation is increasingly assigned
the role of generating capital
saving an economy where capital
sources are scare.
REDISTRIBUTION OF
INCOME AND WEALTH

A progressive tax system is

redistribute income and wealth in
that it taxes more do who posses
greater wealth and income. Hence
more taxes are borne by those who
have the ability to bear such burden.
ALLOCATION OF
RESOURCES

Tax measures through exemption and

incentives ,should be able to enhance
the efficiency of resource allocation and
maximize the benefits of allocated
resources such that only full utilization
and productivity for economic growth is
achieved but also balanced economic
and social development.
ECONOMIC STABILITY

A Development –oriented tax system

must be able to contend with the
instabilities of the “exposed ”economies
an exposed economy is essential that
which is highly vulnerable to the world
market developments which beyond its
control hence its instablities
ECONOMIC STABILITY

This exposed position is generally

caused by ;
1)Heavy dependence of the local
economy on the export of agricultural
of its export of its agricultural or
mineral products as a source of national
income and foreign exchange.
ECONOMIC STABILITY

2.Dominance of foreign investment in

the economy.
3.The dependence of foreign sources for
manufactured products ,including
Oil ,machinery ,food stuffs an other
meet y local productions.
THANK YOU FOR
LISTENING

REFERENCE:
Philippine Public Fiscal Administration
Chapter 6 :Taxation for Development
pp.103-110