FUNDAMENTALS OF TAXATION
C¾ äìp Iµøä¾j cø¾µ
A comprehensive study of taxation principles, laws, and procedures in accordance with current regulations
Topics covered: Tax definitions, functions, legal framework, collection procedures, and rate calculations
Reviewer : Dr. Vero D., SE., MSi., Ak., CA., CPA
C¾ äìp Lpaäµµ O øc¾³pì
(CLO)
CLO-1: Students are able to analyze and fulfill personal and corporate tax
obligations, demonstrate compliance procedures, and understand their
rights and responsibilities as taxpaying citizens (C3, A4)
CLO-2: Students are able to prepare accurate tax reports by applying
current tax regulations, calculating appropriate tax rates, and
implementing proper documentation procedures for various business
entities (C3, A4)
S b-CLO
Upon completion, students will be able to:
Define fundamental taxation concepts and explain the primary functions
of taxation in economic and social contexts
Distinguish between different categories of tax law and their applications
Identify and classify various types of taxes (direct, indirect, state, and
local)
Describe the systematic procedures for tax collection and enforcement
Analyze the conditions that give rise to tax obligations and circumstances
that lead to their termination
Calculate tax liabilities using different tax rate structures (progressive,
regressive, and proportional) (C2, A2)
C¾ äìp Maøpäa« Opäp
1 F µja³pµøa« Ta C¾µcpáøì 2 Ta F µcø¾µì aµj Lpa« Fäa³p¾ä¨
Understanding core tax definitions, characteristics of Analysis of budgetary and regulatory functions of
taxes, and key terminology in taxation systems. taxation. Study of constitutional basis for taxation,
Exploring various perspectives from leading tax legal hierarchy, and tax regulations in administrative
experts. law.
3 Ta La C«aììcaø¾µ aµj Päµcá«pì 4 Tp¾äpøca« F¾ µjaø¾µì
Examination of formal vs material tax law, public vs Study of insurance theory, benefit theory, carrying
private tax law, and fundamental principles governing capacity theory, and obligation theory as
tax collection and administration. justifications for tax collection.
5 Ta C«aììcaø¾µì aµj Caøp¾äpì 6 Aj³µìøäaøp Pä¾cpj äpì
Analysis of direct vs indirect taxes, central vs Detailed study of assessment systems, collection
regional taxes, and objective vs subjective taxes. methods, tax audits, and dispute resolution
Understanding tax jurisdiction and authority. procedures in taxation.
7 Ta Dpbø Maµap³pµø 8 Ta Raøp Søä cø äpì
Understanding how tax obligations arise, statute of Analysis of progressive, regressive, and proportional
limitations, methods of payment, and conditions for tax rates. Study of effective tax rates and tax
tax debt termination. brackets in various contexts.
Dpµø¾µ ¾ Ta
Pä¾. Dä. R¾c³aø S¾p³øä¾ S. I. D¥a¥ajµµäaø
A mandatory financial obligation involving A legally enforced economic obligation
the systematic transfer of monetary triggered by specific taxable events (such
assets from private entities to the state as earning income, property ownership, or
treasury. This funds both operational state commercial transactions). While
expenditures (like public services and compulsory and enforceable through legal
administration) and creates a "surplus" means, it differs from fines or penalties as
reserve. This surplus specifically serves it's not punitive. The payment must align
as public savings, strategically allocated with government-established tax rates and
for public investment in infrastructure, regulations, yet taxpayers cannot demand
education, and social development direct individual benefits, as taxes serve
programs. collective societal welfare through public
services and infrastructure.
Dä. N. J. Fp«j³aµµ
A non-voluntary monetary contribution imposed through sovereign authority, characterized
by three key elements: unilateral imposition by the state, absence of direct quid pro quo
benefits, and exclusive allocation toward public expenditure. This includes funding essential
government functions like national defense, public safety, healthcare systems, and
environmental protection, following standardized assessment procedures and collection
norms.
Iµpäpµø Caäacøpäìøcì—Ta
1 Baìpj ¾µ øp «a 2 Wø¾ ø µjj a« c¾µìjpäaø¾µ
Taxes are collected strictly according to established Unlike commercial transactions, taxpayers cannot
legal frameworks, such as the National Tax Code and demand specific benefits in return for their tax
its implementing regulations. This ensures that tax payments. For example, a citizen paying high income
collection is not arbitrary but follows standardized tax cannot demand preferential access to public
procedures and rates. services or special government treatment.
3 C¾««pcøpj b øp ìøaøp 4 F¾ä ¾päµ³pµø p ápµjø äpì
Tax collection is exclusively managed by authorized As highlighted by Soemitro's definition, tax revenue
government bodies, from national revenue agencies serves two primary purposes: financing day-to-day
handling income tax to municipal authorities government operations (like public servant salaries
collecting property taxes. This mirrors Feldmann's and infrastructure maintenance) and funding public
definition of taxes being owed to proper authorities. investments (such as new highways, schools, or
healthcare facilities).
Ta F µcø¾µì
B jpøaä F µcø¾µ Rp «aø¾ä F µcø¾µ
Tax serves as a primary source of government revenue to Tax acts as a powerful tool to implement government
finance vital expenditures. Routine expenditures include policies beyond revenue collection. For example, higher
civil servant salaries, public facility maintenance, and taxes on luxury goods can reduce income inequality, while
social welfare programs. Development expenditures cover tax incentives for green technology promote
infrastructure projects, educational initiatives, and environmental sustainability. In the economic sphere, tax
healthcare system improvements. In many countries, tax holidays attract foreign investment, and progressive tax
revenue accounts for over 80% of total government rates help redistribute wealth.
income.
To maintain public trust and compliance, the government must balance tax collection with tangible public services,
including well-maintained infrastructure, accessible healthcare facilities, quality education, and efficient administrative
services.
Ta Lpa« Søaø ì
P b«c La C« La Cä³µa« La
Governs the relationship between Regulates tax-related transactions Addresses tax fraud, evasion, and
tax authorities and taxpayers, between private parties, including other tax-related offenses,
including the government's power tax clauses in contracts, transfer establishing penalties for non-
to impose and collect taxes, audit of tax obligations in business compliance with tax regulations
procedures, and taxpayer rights deals, and resolution of tax-related and enforcement procedures for
and obligations in dealing with disputes between individuals or both individual and corporate tax
revenue agencies. companies. violations.
Tax Law Division
Substantive Tax Law Formal Tax Law
Defines the core elements of taxation including tax Encompasses the procedural framework for implementing
subjects (who must pay), tax objects (what is being taxed), tax regulations, including tax assessment procedures,
and tax rates (how much to pay). For example, it covers filing requirements, audit processes, and dispute
income tax regulations, property tax calculations, and resolution mechanisms. It covers practical aspects such
value-added tax determinations. This branch establishes as tax returns submission deadlines, documentation
the legal basis for tax obligations and relates directly to requirements, appeal procedures, and the rights and
both public and civil law aspects of taxation. obligations of both tax authorities and taxpayers during
administrative processes.
