The Different Classification of Taxes in the Philippines
Taxation is a way of raising income in order to defray the necessary expenses of the government. It is the inherent power of the state to demand contribution to finance all the government expenses.
Taxes are classified according to the object, to the bearers of burden, to the determination of amount, to the purpose, to the scope and to the graduation of rate.
According to the subject matter or object, taxes are either Personal, Poll or Capitation, Property and Excise.
The Personal, Poll or Capitation tax is the fixed amount that is imposed to a person that is residing within a specific territory. This is regardless to their property, occupation or business.
The Property tax is the tax that is imposed on ones property; whether with is a real property or personal property in proportion with the property’s value.
The Excise Tax is a tax that is imposed upon the performance of an act as well as the enjoyment of a privilege or the engaging in a particular occupation.
According to who bears the burden, taxes are either direct or indirect.
The direct tax is the tax that is directly demanded from and paid by the taxpayers.
The Indirect tax is the tax that is demanded from a certain person in the intention as well as expectation that the particular person shall indemnify himself at the expense of another.
According to the determination of the amount, taxes are further classified to specific and Ad valorem.
The Specific Tax is the tax that is of fixed amount that is imposed by the head or number, or by some of the standard of the weight and measurement
The Ad valorem Tax is the Tax that is of fixed proportion in relation with the value of the property in respect to which the tax is assed.
According to the purpose, taxes are further classified as General, Fiscal or revenue and Special of regulatory.
The General, Fiscal or revenue tax is the tax that is intended for the general purposes or expenses of the government.
The Special or regulatory tax is the tax that is intended for a specific purpose.
According to the Scope, the taxes are classified to either National or municipal or Local.
In the National scope, the taxes are imposed by the National Government itself while in the municipal or local, the taxes are imposed by the local government.
According to the graduation or rate, taxes are further classified into Proportional, Progressive or Graduated and Regressive.
The Proportional tax is the tax that is based upon the fixed percentage vis-à-vis the amount of the property or other bases on which to be taxed.
The Progressive or Graduated tax is the tax rate increase upon the increase of the base rate.
The Regressive tax is the tax rate decrease upon the increase of the base rate.