Essential Characteristics of Tax

 

.       Explain briefly the seven (7) essential characteristics of the tax. 

(EPPPSLP)

(1)  It is an enforced contribution 

-- A tax is not a voluntary payment or donation and its imposition is in now way dependent upon the will or assent, open or implied, of the person taxed.

(2)  It is proportionate in character 

-- A tax is laid by some rule of apportionment according to which persons share the public burden. It is ordinarily based on ability to pay.

(3)  It is generally payable in money 

-- tax is usually understood to be a pecuniary burden; an exaction to be discharged alone in the form of money which must be in legal tender

(4)  It is levied on persons or property 

-- a tax may also be imposed on acts, transactions, rights or privileges. In each case, however, it is only a person who pays the tax

(5)  It is levied by the state which has jurisdiction over the person or property 

-- the object to be taxed must be subject to the jurisdiction of the taxing state

(6)  It is levied by the law-making body of the state 

-- the power to tax is a legislative power which under the Constitution only Congress can exercise through the enactment of tax statutes; local legislative bodies are now given direct authority to levy taxes, fees, and other charges pursuant to the Constitution subject to such guidelines and limitations as may be provided by law

(7)  It is levied for public purpose or purposes 

-- revenues derived from taxes cannot be used for purely private purposes or for the exclusive benefit of private persons