Economic content of taxes: types, principles of taxation and functions

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Organization of an effective taxation system is a key task of the fiscal policy of the modern state. The balance in approaches to resolving issues of replenishing the budget through tax collections is expressed in the multidirectional observance of the interests of subjects of economic infrastructure. This is a necessary condition for the stable development of economic systems. Eliminating the shortcomings and risks of an excessive increase in this burden is impossible without understanding the economic content of taxes, especially in the context of goals aimed at increasing the investment attractiveness of the country.

Tax in the real sector of the economy

Each socio-economic formation has its own income system, determined byproduction processes, the nature of commodity-money relations, the functions and the very nature of the state structure. In turn, taxation is one of the main ways to increase budget revenues. In most states, the collection of taxes is carried out in order to ensure solvency at all levels of production of power. And even if we exclude the division according to the directions of payments within the framework of budget support (at the regional and federal levels), the principles for distributing funds may differ. For example, the economic content of the tax is expressed not only in financing the activities of the government and local governments, but also in the formation of various funds and organizations that are also part of the state administration structures.

Types of taxes

There are several classification features of modern taxation. Basic in this context are financial and economic signs, which include:

• The method of withdrawal is indirect and direct.
• Shifting the burden of taxation - direct and indirect.
• The method of taxation is a tax from a legal or natural person, as well as general taxes.
• The unit of taxation is estimated and economic tax.
• Tax rate - regressive, progressive, proportional, multiple of a certain indicator or flat tax.
• Scope of application - special and obligatory taxes.
• Focus on specific and abstract taxes.
• Method of expression - non-cash and cashtaxes.
• Source (as a general indication) - tax on an expense or income.

Also, the economic content of taxes does not at all preclude their consideration with the use of administrative and legal features. In this case, such separation principles as the right to use payments, the structural and administrative level, the method of transfer, etc. will come to the fore. Less significant and rather technological classifications reflect the temporal and spatial characteristics of the application of the tax system, including the frequency, time and place of taxation.

Types of objects of taxation

Determining the parameters of the tax collection system is impossible without taking into account the specifics of the object of financial encumbrance. The main objects of taxation are:

• Excises. As a rule, groups of goods that fall under the categories of excise products - for example, these include alcohol, ethyl alcohol, certain types of perfumery and cosmetic products, etc.
• Organizations making a profit. Actually, the economic content of income tax is disclosed in the form of income received from all types of business activities related not only to the sale of goods, but also to the provision of services. The same group includes financial activities that entail the receipt of operating income.
• Natural resources. We are talking about the use of natural resources - for example, it can be logging, water abstraction, mining, etc.

Tax functions

The taxation system, in addition to directly filling the budget, has several more important tasks, which are achieved, among other things, through the principles of the economic content of taxes. Functions, in particular, can be the following:

• Fiscal. Technologically ensures the replenishment of financial resources required for the implementation of social, budgetary and other programs, as well as for maintaining the work of public institutions.
• Regulating. The tax can also be used as a means of influencing the reproduction process - for example, as a stimulus or brake in the development of an enterprise due to certain indicators of the financial burden.
• Control. Income and expenses of taxpayers can be controlled, among other things, by monitoring tax payments.

At the heart of each of these functions is still an economic component. The most important effect of the application of the tax system of taxation can be achieved with the help of socially fair redistribution. To do this, the state must formulate a clear fiscal policy based on certain state priorities. In general, the socio-economic function of taxes can be represented as an indirect, but still a way to regulate financial activity.

Principles of taxation

The organization of the taxation system in any form should be guided by a number ofprinciples that allow achieving the set goals with the greatest effect.

The basic principles of this kind include:

• Equanimity - generality and equal tension are assumed in the process of tax withdrawal in accordance with the unity of state requirements for taxpayers.
• Definiteness - clarity, clarity and unambiguity in determining the fundamental characteristics of the tax system. The main characteristics of the economic content of taxes include rent, profit, wages, etc.
• Unburdened – the principle of moderation in taxation.
• Stability - the stability of the operation of various types of tax rates within a set period of time.

Tax policy

In the fiscal system, policy is understood as a set of measures aimed at achieving strategic objectives within the overall economic development. In this sense, the economic content of taxes can also reflect the nature of state intervention in the economic sphere. The main tasks of regulating tax policy include providing government bodies with financial resources, stimulating economic growth, creating favorable conditions for economic activity in the country and smoothing out inequality between different income levels of citizens.

Taxation mechanisms

Practical implementation of tax policy is impossible without a developed mechanism, which is based on organizational and legal forms andmethods. In Russia, the basic principles for the application of this mechanism are regulated at the level of Federal legislation in terms of the economic content of taxes - Article 8 of the Tax Code of the Russian Federation, in particular, reveals the concept of tax collection as a mandatory cash contribution. This is the central concept on the basis of which state bodies carry out the withdrawal of taxes. However, the cumulative mechanism also provides for the possibility of adjusting the fee through the introduction of benefits, the establishment of tax immunity, changes in rates, lowering the tax salary, etc.

Tax management

One of the forms of fiscal activity of the state, the basis for which is the legislation. At the basic level of management, the procedure for taxation is established in accordance with the purpose of the tax and the economic content of the fee within a certain environment of financial burden. The procedures, forms, competencies and organizational methods are specifically established, in accordance with which the authorized authorities in this area will act. A set of functions is also defined with a list of tasks that will ensure control with the prosecution of persons who have violated tax law.

Interaction between tax authorities and taxpayers

Despite the obviousness of the essential process of taxation and the mechanisms of its production, the relationship between conditional collectors and taxpayers can be of a different nature. In particular, there are several methods of such interaction:

• Administrative coercion. It is envisaged the use of sanctions instruments, the seizure of property and financial accounts.
• Regulated alternatives. The taxpayer is given the opportunity to choose between different forms of tax payment at rates.
• Friendly partnership. A relatively new form, in which the economic content of the tax is expressed by the relationship between the authorities and the taxpayer, not at the level of an administrative requirement, but on the basis of partnership cooperation, which can take the form of an agreement. What does it mean? This means that, due to certain circumstances, the taxpayer can fulfill its obligations to the control authorities on special previously agreed conditions.

Conclusion

The global process of developing taxation systems suggests that tax collection mechanisms are improving, becoming more flexible and efficient. In the advanced countries, the essential abolition of the very concept of collection is also taking place. The financial collection turns into a more complex form of searching for the optimal source for collection, which is fundamentally different from the modern approach to the work of the fiscal system. But, as before, in Russia the economic content of the tax is expressed by the relationship between authorities and citizens with a minimum range of freedoms within the strict framework of legal regulation. Even the innovation in the form of taxation with a form of friendly partnership is still reluctantly accepted due to the low level of administrative capacity. However, experts point outthe progressive nature of the development of the sphere of taxation in the Russian Federation, indicating the introduction of innovative technologies and, in general, the government's interest in revising outdated models of the application of legislation in this area.