Introduction to Income Taxation

These flashcards cover key concepts, definitions and principles related to income taxation as discussed in the lecture notes.

Taxation

An act, process, or means by which the Sovereign makes demand for revenue to support its existence and carry out its legitimate objectives.

Revenue purpose

Taxes imposed primarily to raise revenue for government activities in promotion of general welfare.

Regulatory purpose

Taxation power exercised to regulate inflation and serve as a key instrument for social control.

Inherent power of sovereignty

The power of taxation exists co-extensively with sovereignty, allowing government to exert this power without constitutional provisions.

Territorial in Scope

Tax laws typically do not operate beyond a country’s jurisdictional limits unless there's a relationship between the taxing State and the object.

Double Taxation

Occurs when the same taxpayer is taxed twice by the same tax jurisdiction for the same thing.

Tax Evasion

The use of unlawful means by a taxpayer to avoid payment of due taxes.

Tax Avoidance

The legal way of minimizing tax obligations through planning and strategy.

Situs of Taxation

Refers to the location where taxation is imposed; this determines the jurisdiction and rules applicable to tax.

Non-Delegation of the Power to Tax

The principle that the power to tax cannot be delegated and is purely a legislative function.

Uniformity in taxation

Taxable articles or properties of the same class shall be taxed at the same rate.

Exemption of Government Agencies from Taxation

Government is exempt from taxes as long as it is not conducting proprietary functions.