Taxation and

Government
Abdullah Samy Assyakiri
2011011050
Camelia
Chairul maulana
 What are
TAXes?
Taxation is imposition of compulsory levies on individuals or entities by
governments. Taxes are levied in almost every country of the world,
primarily to raise revenue for government expenditures. Without
revenue, or income from taxes, government would not be able to provide
goods and services. In modern economies taxes are the most important
source of governmental revenue. Taxes differ from other sources of
revenue in that they are compulsory levies and are unrequited i.e., they
are generally not paid in exchange for some specific thing, such as a
particular public service, the sale of public property, or the issuance of
public debt.
 What are
TAXes?
While taxes are presumably collected for the welfare of taxpayers as a
whole, the individual taxpayer’s liability is independent of any
specific benefit received. There are, however, important
exceptions: payroll taxes, for example, are commonly levied on
labour income in order to finance retirement benefits, medical
payments, and other social security programs all of which are
likely to benefit the taxpayer. Another example of a tax that is
linked to benefits received, if only loosely, is the use of taxes on
motor fuels to finance the construction and maintenance of roads
and highways, whose services can be enjoyed only by
consuming taxed motor fuels.
 Tax Features
There are 4 tax features:

1. Tax is a compulsory contribution of citizens

This means that everyone has an obligation to pay taxes. However, this only applies to citizens who have met the
subjective and objective requirements. Namely citizens whose income exceeds the Non-Taxable Income.
2. Taxes are coercive for every citizen
If someone has met the subjective and objective requirements, then he is obliged to pay taxes. In the tax law it has been
explained, if someone intentionally does not pay the tax that should be paid, then there is a threat of administrative
sanctions or criminal penalties.
3. Citizens Don't Get Immediate Benefits
When you pay a certain amount of tax, you don't immediately receive the benefits of the tax paid. What you will get, for
example in the form of road repairs in your area, free health facilities for families, educational scholarships for your
children, and others.
4. Under the law
This means that taxes are regulated in state law. There are several laws that regulate the mechanism for calculating,
paying, and reporting taxes.
 Tax Function

 Budget Function
Tax is a source of state financial income
by collecting funds or money from taxpayers to the
state treasury to finance national development or
other state expenditures.
 Regulatory Function
Tax is a tool to implement or regulate state
policies in the social and economic fields. These
regulatory functions include :
 Taxes can be used to curb inflation.
 Taxes can be used as a tool to encourage
export activities, such as export taxes on goods.
 Taxes can provide protection or
protection for domestically produced goods, for
example Value Added Tax (VAT).
 Tax Function

 Taxes can regulate and attract capital investment

that helps the economy to be more productive.
 Equalization Function
Taxes can be used to adjust and balance
the distribution of income with the happiness and
welfare of the community.
 Stabilization Function
Taxes can be used to stabilize economic
conditions and conditions.
 Tax Type
a. Types of Taxes by Nature
• Direct Tax
Direct tax is a tax that is given periodically to taxpayers based on a tax
assessment letter made by the tax office. The tax assessment letter
contains the amount of tax that must be paid by the taxpayer.
• Indirect Tax
Indirect tax is a tax that is only given to taxpayers when carrying out
certain events or actions.

b. Types of Taxes Based on The Collection Agency

• Local Tax (Local)
Local taxes are taxes levied by local governments and are limited to
the local people themselves.
• State Tax (Central)
State taxes are taxes collected by the central government through the
relevant agencies, namely the Directorate General of Taxes.
 Tax Type

c. Types of Taxes Based on Tax Object and Tax Subject

• Objective Tax
Objective tax is a tax that is collected based on the object. For
example: import tax, motor vehicle tax, stamp duty, and many
others.
• Subjective Tax
Subjective tax is a tax that is taken based on the subject.
Examples include property taxes and income taxes.
Tax Purposes and Benefits
a. For Development
One of the purposes of tax collection by the state to every citizen is for
development costs. All state infrastructure development is financed by
taxes paid by citizens. The community as taxpayers will later benefit
from the availability of complete facilities and infrastructure, ranging
from schools, roads, hospitals and various other public facilities.

b. Tax for Reproductive State Expenditure

Tax money obtained from the payment of citizen taxes by the state is
used for various needs. The needs that are financed by this tax also
vary in nature, including needs that are reproductive. This expenditure
means expenditure that can later provide economic benefits for the
community. An example is the use of taxes for agricultural needs.3.
Taxes for Providing Subsidies. Indonesian people get a lot of
subsidies given by the government to the underprivileged. There are
various types of subsidies, ranging from fuel subsidies, food subsidies
and various other types of subsidies. The subsidies given to people in
need are also obtained from taxes which are also paid by the people
themselves.
Tax Purposes and Benefits
c. Taxes for Providing Public Transportation Services
People need public transportation to support their
mobility, whether it's a long distance or a short
distance. Public transportation services that can be
enjoyed by the community can also be enjoyed from
the results of paying taxes. This is the benefit that can
be obtained from taxes, namely to provide adequate
public transportation services for the community.

d. Tax for Unproductive Expenditure

State income derived from tax payments is also used
to finance non-productive needs or expenses. This
non-productive expenditure, for example, is for the
protection of orphans and for the needs of national
defense. All of these needs are financed by taxes.
THANK YOU