What is taxation?

Definition: Taxation refers to the act of a taxing authority actually levying

tax. Taxation as a term applies to all types of taxes, from income to gift
toestate taxes. It is usually referred to as an act; any revenue collected is
usually called "taxes."
It is the inherent power by which the sovereign state imposes financial burden upon
persons and property as a means of raising revenues in order to defray the
necessary expenses of the government (Tax Digest by Crescencio Co Untian,
2002).
Taxation is the imposition of financial charges or other levies, upon a taxpayer (an
individual or legal entity) by a state such that failure to pay is punishable by law.
It is a mode by which government make exactions for revenue in order to support
their existence and carry out their legitimate objectives (Tax Law and Jurisprudence
by Justice Vitug, 2000).

Concept of Taxation
Taxation is the inherent power of the state to impose and
demand contribution upon persons, properties or rights
for the purpose of generating revenues for public
purpose.
The power of taxation upon necessity and is inherent in
every government or sovereignty.

Significance of taxation
Primary purpose : generate funds or revenues used to
defray expenses incurred by the government in
promoting the general welfare of its citizenry

Other purpose :
to equitably contribute to the wealth of the nation
To protect new industries
To protect local producers

Classification of taxes
1. As to subject matter
. personal, poll or capitation tax (ex. Residence tax)
.Property tax (ex. Real estate tax)
.Excise tax (ex. RVAT)
2. As to who bears the burden
.Direct tax (ex. Income tax)
.Indirect tax (ex. Buying of goods and services)
3. As to determination of account
.Specific tax (ex. Taxes on wines)
.Ad Valorem Tax

Entities exempted from taxation

Religious Institutions
Charitable Institutions
Non-profit, Non-Stock Educational Institutions
Non-profit Cemeteries
Government institutions
Foreign Diplomats