Private Economy Public Economy Benefit of Business & Service Industry Budget is allocated based Determines How much on previous. spends according to needs use labor and capital effectively.
Concerned with a collective sytem of economyReason to study:To be aware in numerous functions of the government.
GovernanceThe physical exercise of management power and policy Fiscal AdministrationHow public budgets operate Public incomeHow wealth is produced, distributed and preserved Taxation Other sources of government IncomeEx. Individual Income Tax
The Bureau of Internal Revenue Internal revenue taxes fees and charges enforcement of all forfeitures penalties and finespresently headed by Deputy Commissioner Lilian Hefti.
The Bureau of Custom In charge of imports exports and foreign trade.presently headed by Commissioner Napoleon Morales
Income taxes of individuals Business property taxes Residence taxes Import taxes Inheritance taxes Gift taxes Other specific taxes
Collection of fines and fees Licenses and registration charges Commercial revenue Profits earned by government- operated and controlled corporations.
Political reluctance to raise taxes Government- sponsored capital improvements To stimulate the economy
Internal Sources Ex. Central Bank External Sources Ex. Foreign Governments
Functional Classification of Public ExpendituresBy: Paulo
Isthe duty of the Government to provide its children with the rudiments of at least a Primary Education.
stateis to provide for its National Defense, thus, protection against the foreign aggression or even domestic terrorism.
public welfare cover a wide range. The term is used to include expenditures for society indigents, the infirm, and the aged.
Another priority of the government. Priority projects include infrastructure, agro- industrial production, both for export and domestic consumption.
is the act of laying a tax. It is the process or means by which the sovereign through its law-making body raises income to defray the necessary expenses of the government.
1) The primary purpose is to raise income for government needs and this is identified as the revenue purpose.2) The secondary purposes of taxation are:
A) Compensatory Purposes• To reduce excessive inequalities of wealth• To maintain high level of employment• To control inflationB) Sumptuary or Regulatory Purposes• To implement the police power of the state which in charge in the promotion of general welfare
• The power of taxation proceeds upon the theory that the existence of government is a necessity and that it cannot continue without the means of pay its expenses.• The state collects taxes from the subjects of taxation in order that it may be able to perform the functions.• The lifeblood Theory means that taxes are the lifeblood of the government and their prompt and certain availability are an imperious( expecting obedience) need.
Taxation Taxation is the process of tax collection. Taxesare most important source of government revenues.
2 GENERAL PRINCIPLES OF TAXATION1. Benefit Received Principle holds that an individuals tax burden should be proportional to the amount of "benefit" that the individual receives from the resource .2. Ability to pay Principles underlies the system of progressive income taxation the richer pay a higher percentage of income tax
2 DIMENSIONS OF ABILITY TO PAY PRINCIPLES: 1.Horizontal Equity implies that we give the same treatment to people in an identical situation. 2.Vertical Equity Implies that people with higher incomes should pay more tax.
The Cost of Service Theory Satisfy the idea of equity or justice in taxation Fiscal Adequacy The source of revenue should be sufficient to the demands of public expenditures. The tax should be adequate for future revenues.
PROPORTIONATE PRINCIPLE Taxes are levied in proportion to the income of individuals
A good tax ought to be certain, not arbitrary
~ is the debt owed by a central government.~ the total amount of money that a countrys central government has borrowed to fund its spending on public services and benefits.
Money borrowed by the government through issuance of securities, bonds and bills. The government borrows money to make up the difference between revenues and expenditures. The money comes from lenders within the country and from foreign lenders.
Stabilization~ involves the effort by the government to achieve “full employment with low inflation” or an “acceptable unemployment and inflation”.
The graph below shows historical exchange rates between the Philippine Peso (PHP) and the US Dollar (USD) between 8/6/2012 and 9/4/2012
Fiscal Policy~ measures are frequently used in tandem with monetary policy to achieve certain goals."
Tariff~ is a tax or duty levied on the import of goods.~ is a tax that a government collects on good coming into a country.