Glossary of Terms

GLOSSARY OF TERMS: CHAPTER 1-GENERAL PRINCIPLES 1.TAXATION - IS THE PROCESS OR MEANS BY WHICH THE SOVEREIGN, THROUGH ITS LAWMAKING BODY, RAISES INCOME TO DEFRAY THE NECESSARY EXPENSES OF THE GOVERNMENT. 2.NECESSITY THEORY -THE THEORY THAT THE EXISTENCE OF GOVERNMENT IS A NECESSITY. 3.BENEFIT-RECEIVED THEORY THE THEORY THAT STATES THAT THERE ARE RECIPROCAL DUTIES OF PROTECTION AND SUPPORT BETWEEN THE STATE AND ITS INHABITANTS. 4. NON-DIVERSION -TAX MONEY COLLECTED FOR SPECIAL PURPOSE MUST BE APPLIED ONLY FOR THAT PURPOSE 5. PERSONAL, POLL OR CAPITATION TAX -TAX OF A FIXED AMOUNT IMPOSED ON INDIVIDUALS RESIDING WITHIN A SPECIFIED TERRITORY WITHOUT REGARD TO THEIR PROPERTY OR THE OCCUPATION IN WHICH THEY MAY BE ENGAGED. -EXAMPLE: COMMUNITY TAX (FORMERLY RESIDENCE TAX) OR CEDULA. 6. PROPERTY TAX -TAX IMPOSED ON PROPERTY, WHETHER REAL OR PERSONAL, IN PROPORTION EITHER TO ITS VALUE OR WITH SOME OTHER REASONABLE METHOD OF APPORTIONMENT. -EXAMPLE: REAL ESTATE TAX 7. EXCISE OR PRIVILEGE TAX

-TAX IMPOSED UPON THE PERFORMANCE OF AN ACT, THE ENJOYMENT OF PRIVILEGE OR THE ENG AG ING IN OCCUPATION. - EXAMPLES: INCOME TAX, VALUE -ADDED TAX , PERCENTAGE TAX 8. DIRECT TAX -TAX WHICH IS DEMANDED FROM THE PERSON WHO IS INTENDED TO PAY IT. - EXAMPLES: COMMUNITY TAX, INCOME TAX 9. INDIRECT TAX -TAX WHICH THE TAXPAYER CAN SHIFT TO ANOTHER - EXAMPLES: BUSINESS TAXES, CUSTOMS DUTIES 10. SPECIFIC TAX -TAX OF A FIXED AMOUNT IMPOSED BY HEAD OR NUMBER, OR BY SOME STANDARD OF WEIGHT OR MEASUREMENT. -EXAMPLES: EXCISE TAXES ON DISTILLED SPIRITS, CIGARS, CIGARETTES 11. AD VALOREM TAX -TAX OF A FIXED PROPORTION OF THE AMOUNT OR VALUE OF PROPERTY WITH RESPECT TO WHICH THE TAX IS ASSESSED. -EXAMPLES: REAL ESTATE TAX, CUSTOMS DUTIES, INCOME TAX 12. GENERAL, FISCAL OR REVENUE TAX -TAX IMPOSED TO RAISE REVENUE FOR THE GOVERNMENT. - EXAMPLES: INCOME TAX, BUSINESS TAXES 13. SPECIAL OR REGULATORY TAX -TAX TO ACHIEVE SOME SOCIAL OR ECONOMIC ENDS IRRESPECTIVE OF WHETHER REVENUE IS ACTUALLY RAISED OR...