Taxation is the act of levying a tax. It’s the process or means by which the sovereign
(independent State), through its law-making body (legislative branch), raises
income to defray the necessary expenses of the government.
Tax are
enforced proportional contributions from persons and property, levied by the
State by virtue of its sovereignty for the support of the government and for
all its public needs.
Purposes
of Taxation
1.
Primary Purpose – is to raise revenue for
governmental needs; also called revenue
purpose
2.
Secondary Purposes
a.
Compensatory purposes
1)
To reduce social inequality
2)
To encourage the growth of local
industries
3)
To protect our local industries against
unfair competition
b.
Regulatory purpose – to implement the
police power of the State to promote the general welfare
