Page 6 - Taxation (TAX 112 A & B, BA-203)

Business, Transfer and Income Taxation

TAX 112 A & B, BA 203

Source: E.Valencia & G. Roxas, Income Taxation (2010)

Introduction Income Tax

Taxation is the process or means by which the

sovereign through its law-making body, raises income to pay the

necessary expenses of the government. Expressed in another

way, it is a method of apportioning the cost of the

government among those who are privileged to enjoy its

benefits and must, therefore, bear its burden.

Aside from financing purely the government

operational and investment expenditures, taxation is also

utilized as a tool to carry out national objectives of social

amelioration and economic development.

Income Tax is referred to tax levied on yearly income

from property, profession, trade or offices and other personal

income sources (passive and active income streams).