Seminars Schedules

Principles of Sound Tax System

Sunday, 14 August 2011, 13:59 | Category : National Taxes
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The following are the basic principles of a sound tax system:

Fiscal adequacy means that government revenues from taxation must suffice to meet fiscal requirements. This implies that a good tax system of a State may not budget deficit.

Administrative feasibility means that tax laws, rules and regulations must be capable of being administered and complied with. Citizenry must easily understand its application for its compliance. No matter how willing and able a taxpayer in complying the mandates of a tax law if he could not comprehend, he could not fully comply the same without lapses. Notably, each error in compliance is penalized and good faith is not always a good defense.

Theoretical justice has something to do with taxpayer’s capacity to pay. Taxes imposed should be capable of being paid by the taxpayers; otherwise, its imposition would not serve the purpose because no matter how willing they are to pay, they are not capable of doing so.

I leave it now to you to determine whether or not Philippines has a sound tax system based on the above criteria.

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