FINALS
April 26, 2021
A
MANDATED
TOPIC
ON
TAXATION
Module 1
(Finals)
LEARNING
OBJECTIVES
:
1
Describe the principles of
taxation;
2
Articulate why taxes should be
paid;
3
Establish the link between
taxation and the concepts of
justice and morality;
4
Summary and Action Items
LEARNING
OBJECTIVES
:
5
Distinguish tax avoidance and
tax evasion;
6
Point put moral issues;
7
Explain the bases of tax morale
TAX
Your facilitators
Taxes are used to improve infrastructure
Taxes without good governance and
accountability is open to abuse and corruption.
"Compulsory unrequited payments to general
government" -(OECD)
"A fee levied by a government or regional entity on
a transaction, product or activity in order to
finance government expenditure" -(TJNA)
Life blood of a country
Taxes are need to
ensure general welfare
TAX
"Taxes are enforced proportional contribution,
generally payable in money, levied by the law-making
body of the State by virtue of its sovereignty upon
the persons of property within its jurisdiction for the
support of the government and all public needs Political Perspectives
"The inherent power by which the sovereign state
imposes financial burden upon persons and
property as a means of raising revenue to defray the
necesssary the necessary expensese of the
government"
Your facilitators
Life blood of a country
Taxes are need to
ensure general welfare
Why do we have to pay TAXES?
Why do we
have to pay
TAXES
?
1
TAXATION AND ITS GOALS
2
TAXES, MORALITY AND JUSTICE
3
TAX AS MORAL OBLIGATION
4
TAX AVOIDANCE AND TAX EVASION
TAXATION AND ITS GOALS
BASIS OF TAXATION IN TWO FOLD
1. AS A NECESSITY
2. RECIPROCAL DUTIES OF PROTECTION AND
SUPPORT BETWEEN THE STATE AND ITS
INHABITANTS
TAXATION AND ITS GOALS
5Rs to which good taxation should be characterized:
1. RAISE REVENUE
2. REPRICE GOODS AND SERVICES CONSIDERED TO BE INCORRECTLY PRICED BY THE
MARKET SUCH AS TOBACCO, ALCOHOL, CARBON EMISSIONS, ETC. AND BY PROVIDING
TAX RELIEFS. E.G. FOR CHILDCARE
3. REDISTRIBUTE INCOME AND WEALTH;
4. RAISE REPRESENTATION WITHIN THE DEMOCRATIC PROCESS BECAUSE IT HAS BEEN
FOUND THAT ONLY WHEN AN ELECTORATE AND A GOVERNMENT ARE BOUND BY THE
COMMON INTEREST OF TAX DOES DEMOCRATIC ACCOUNTABILITY REALLY WORK; AND
FINALLY FACILITATE.
5. REORGANIZATION OF THE ECONOMY THROUGH FISCAL POLICY
ACTIVITY
1
List down 5 family members that are affected by tax.
1. Which of the following listed members is highly
taxed?
2. Is the tax or the taxes being paid from an item
necessary?
3. How can you help as a member of the family to
avoid unnecessary items to save from paying
taxes?
Get a paper
and pen or
open google
docs and list
down your
answers
TWO ASPECTS OF TAXES:
1. Social Aspects
2. Moral Aspects
THE PRINCIPLE OF THE COMMON GOOD (2008);
the essential elements...
1. It recognizes the human
person as a sacred and
social being.
2. it is built upon the
principle of human dignity
and the equality of all
people.
3. it recognizes that human
beings realize their dignity
and achieve their destiny in
particular communities,
not isolation.
4. it requires basic
foundation of basic rights
which are minimum
standards for life in
society.
5. it is a personal and
communal.
6. It must be active at
every level of life.
7. It is directed by a moral concern
that each person must participate
and share in the benefits of social
advances.
8. It is needed to avoid the harmful
forces of coercion, domination, or
exploitation.
9. it is needed for the overall just
functioning of a society.
10. It recognizes that governments
and political institutions are
necessary and have responsibility
for achieving the common good.
11. It must be an
increasingly
transnational- or globalreality encompassing the
entire human
12. it not utilitarian in
nature. It's not the
greatest good for the
greatest number because
this can allow for the
exclusion of individuals.
TAX AS A
MORAL
OBLIGATION
"
From each according to his
ability
,
to each according to
his need
."
Acts
2:45
biblical interpretations
of the common good
Human being
cannot live
alone
.
We are directed to the other in the personal realm,
recognizing the other as neighbors and in the wider
context, social realm.
1. That the good of each human person is
intimately related to the good of the whole
community.
2. The human person, made in God's image, is
both a sacred being and a social being.
3. The human person can only flourish in
community.
4. The rights and duties of human persons are
realized and carried out in community, which
includes the community of the family along with
the wider society and world.
5. The good of each individual in society is
intimately connected to the good of the wider
group or society 6. Participation peace, proper
exercise of limited authority and the safeguarding
of rights are necessary conditions for the principle
of common good.
Tax as a moral obligation is linked to our understanding of the
common good as the end of taxation.
It is always viewed that taxes are means to flourish society but it is
not only a bad government that may hinder this objective but also
the distorted values of an individual (taxpayer) that deters the
achievement of this goal.
We often complain of poverty and social inequality in perennial
existence but we failed to look into the potential causes of social
ills as our own wrongdoings.
Taxes are believed to address social inequalities amid some other
principles to be strictly observed such as transparency. democracy,
social commitments and responsibilities, fair taxation scheme, and
many others.
"Businesses, like individuals, can only exist and flourish because of a
wider environment of nurture and support. This generates reciprocal
moral obligations.
It means that businesses are parasitic if they make use of the
resources and infrastructure of a country without contributing to it
through taxation.
TAX AVOIDANCE AND TAX EVASION
Tax avoidance is the process whereby an individual uses tax planning so as to
apply all exemptions and deductions provided by tax laws to reduce taxable
income. Through tax avoidance, an individual takes advantage of all legal
opportunities to minimize varied forms of taxes (income tax, gift tax, or estate
tax). Tax avoidance lowers tax bill by structuring transactions so that the largest
tax benefits are reaped. Tax avoidance is legal- and extremely wise.
TAX AVOIDANCE AND TAX EVASION
Tax evasion, on the other hand, is the illegal practice of not paying taxes, by not
reporting income, reporting expenses not legally allowed, or by not paying taxes
owed. Often, it entails taxpayers deliberately misrepresenting the true state of
their affairs to the tax authorities to reduce their tax liability and includes
dishonest tax reporting, such as declaring less income, profits or gains than the
amounts actually earned, or overstating deductions. As tax avoidance is
encouraged, tax evasion is branded as a crime
WHAT IS TAX MORALE?
Tax morale is referred to as the motivation of a country's citizens to pay
taxes, in addition to legal obligations that comes with it. It has impacts
on the economy and perceptions on tax evasion. It has a strong
correlation to tax compliance among developed and developing
countries. Thus, under-standing the factors that drive tax morale is
beneficial in understanding the reason for tax compliance.
different perceptions on tax morale
1. Faith or religious identity
2. Age
3. Gender
4. Self-perceived economic situation
5. Labor status
6. Educational attainment
7. Employment status
8. Trust and satisfaction with government's services
9. Quality of public services: health, education, and social protection It is
interesting to note that the above determinants generated significant
correlation to tax morale in varied studies.