Taxation has been the most powerful tool in conveying national economies to a sustainable life. The governments were able to help the economies to move fast on top of a maintainable and workable track by raising a large percentage of revenue from such taxes.
A financial charge or other toll carried out to an individual who is a taxpayer is considered as tax. Failure to pay this said levy is punishable by law because it is an obligatory command of many administrative divisions.
The taxes can either be paid as its labor equivalent or in money and they also consist of direct or indirect taxes. Any individual or company has a compulsory contribution of payment from their income enforced by the government. Thus, this payment has a long way to go for the betterment of the economy.
Taxation System in the Philippines
The taxation system in the Philippines is a blend of both schedular and global. The resident and domestic taxpayers are both obliged to pay taxes on a worldwide income. The three classes of taxpayers are fiduciaries, individuals and corporations.
- Fiduciaries – contain trusts and estates
- Individuals – this includes residents and non-residents who are getting income from the country and aliens who are engaged in trade whether they are resident or non-resident of the Philippines.
- Corporations – this covers the non-resident foreign corporations, resident foreign corporations, and domestic corporations that make an income in the Philippines.
Here are the principles of Philippine taxation systems
- Under the Philippine-source income, the non-resident taxpayers are being taxed.
- Corporations are imposed at flat rates.
- An individual is charged at a progressive rate.
- The taxes that are being imposed are taxes on property, transactions, and gains or income.
- Taxes on property consist of community tax and property tax.
- Donor and estate’s taxes, tariff and customs duties, amount of tax on business not subject to VAT, excise tax, value-added tax (VAT) are the ones included in the taxes on transactions.
- Taxes on the income aspect take account of capital gains tax like on real property and sale of shares as well as income tax.
The Importance of Taxation System in Building the Economic Status of this Country
Taxes are effective means for correction of the market’s failure to value the services that are available in our land today. They are used for the development of every aspect in our society such as financial, environmental and social. This method has measurably amended the nation in many cases. Since these taxes adjust prices and let the market do the rest, they can definitely meet a broad of goals in a much efficient way.
To conclude, you can’t deny the fact that one of the primary sources of public revenue is the tax income. Indeed, it is the most essential one that will benefit every citizen. The proceeds that are imposed from the corporations, estates and individuals play a crucial role in order to meet the expenditure that is necessary for civic welfare.