Lesson 1 Finals

8/4/2019 Lesson 1 Finals

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Objectives:

recall and understand the functions ofgovernment and the role of fiscal policy in

economic development; be familiar with the basic principles

underlying taxation system of thecountry; and

evaluate the existing system of taxation.

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Starter

Why do we have topay taxes?

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The Welfare State remains a basic

principle of the Government. It is a

commitment to:

Health

Education

Employment

Social Security (help for people who donot have enough money to look afterthemselves and their family)

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Functions of the

Government:To provide social services

= education, health, social justice and

infrastructures

To provide for public goods

= need for national defense, policeprotection, public health and sanitation

To develop a stable economy

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Fiscal Policy

The use of government expenditureand revenue collection to influencethe economy.

Refers to the use of the government

budget.


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Two Main Instruments

Government Expenditure

Government spending.

Along with consumer and business spending

Taxation

Means by

which governments finance their expenditure byimposing charges on citizens and corporate entities.


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Revenue TaxesDuties imposed by the government on households

and business. They primarily serve as source of fuelfor government expenditure.

In the Philippines BIR is responsible for taxcollection

Tariff

It is a tax charged on either imported of exported

good.The collection of tariffs is undertaken by the Bureau

of Customs


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Other Sources of

Government Funds:1. Income from Government Owned andControlled Corporations (GOCCs)

= rent of government properties,treasury bills that are sold by thegovernment, interest in the savings of

government and earnings of governmentowned business

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2. Income from the Sale of CapitalOwned by the Government

= The Sale of corporations and otherproperties of the government provide funds


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3. Grants-in-Aid

= The income of local government is

given to the national government as acontribution of the different governmentagencies.

Aids from different countries arealso included.


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4. Income from the PhilippineAmusement and Gaming Corporation(PAGCOR)

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What is Taxation?

Taxation is the inherent power of theState to impose and demand

contribution for public purpose.

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FOR PUBLIC PURPOSE means that taxation must havefor objective the support of the government in theperformance of various services and the satisfaction of

recognized public network. Hence, proceeds of the taxmust be used:

a. for the support of the government;

b. for some of the recognized objects of the

government;

c. to promote the welfare of the community.


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The need for Taxation:

Promotion of the general welfare andprotection of its citizen.

Performed through:Education

Defense

Social welfare

Food production

Protection of the environment


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The nature of the power ofTaxation

INHERENT POWER OF THE STATEmeans that taxation is essential to the

existence of the government.Thus, it exists without necessity of any

specific grant of power by the

constitution.


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TO IMPOSE AND DEMANDCONTRIBUTION means that taxation is

not a voluntary payment or donationsince its imposition is dependent uponthe will or assent of the taxpayer.


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PURPOSES OF TAXATION:

The purposes of taxation are the following:

To raise revenue

To equitably distribute the wealth of thenation

To pick new industries (by providing tax

exemption new or pioneering industry)To protect local procedures (by imposing

higher custom on cheap imported goods


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Principle

2. Benefit PrincipleBased on two ideas:

Those who benefit more from the governmentservices should be the ones to pay for them;

People should pay taxes in proportion to theamount of services or benefits they receive.

ex. Road users tax


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Principle

3. Equal Distribution Principle

All types of consumers poor and rich, have

the same products and services in theirconsumption list.

They are paying the products and serviceswith the same price including tax.


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Synthesizer

T ax is important to

A accumulate funds for all the

eX penditures of the Government

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Topics next meeting

Basic Principles of a Sound TaxationSystem

Classification of taxes

Tax Exemption

Forms of escape from Taxation

Related Issues

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Lesson 1 Finals

Documents

Transcript of Lesson 1 Finals