PRINCIPLE TAX COLLECTION

The principle of taxation at the opinion of the experts:

In order to achieve the purpose of tax collection, some experts argued about the principle of taxation, among other things:

1. According to Adam Smith in his Wealth of Nations with the teachings of the famous "The Four Maxims", the principle of levying taxes is as follows.

• Equality principle (principle of balance with the ability or fairness): tax collection by the state should be in accordance with the capabilities and income tax payers. State should not discriminate against taxpayers.
• Certainty Principle (principle of legal certainty): all taxation should be based on law, so for those who violate the law will be subject to sanctions.
• Principle of Convenience of Payment (the principle of taxation at the right time or the pleasure principle): taxes should be levied at the right time for taxpayers (the best time), for example when a new taxpayer received income or when the taxpayer receives a prize.
• Efficiency principle (principle of efficient or economic principles): the cost of tax collection is cultivated sparingly, not to place the cost of collecting more tax from the tax collections.

2. According W.J. Langen, the principle of levying taxes is as follows:

• Principle endures power: the size of the tax collected should be based on the size of the income of the taxpayer. The higher the income the higher the tax imposed.
• The principle benefits: tax levied by the state must be used for activities that are beneficial to the public interest.
• The principle of welfare: the tax levied by the state are used to improve the welfare of the people.
• The principle of equality: in the same conditions between taxpayers with one another should be taxed the same amount (treated the same).
• Principle smallest burden: tax collection sought smallest (as low as) when compared with the value of the tax object so as not to burden the taxpayers.

3. According to Adolf Wagner, the principle of tax collection is as follows:

• Principle financial politics : the amount of tax collected is adequate so as to finance or encourage all state activities.
• Economic Principle : determination of the tax object should be appropriate, such as: income tax, tax on luxury goods
• The principle of justice : the general tax levy applies without discrimination, for the same conditions are treated equally.
• Principle administration : issues concerning taxation certainty (when and where to pay taxes), billing flexibility (how to pay) and the cost of taxes.
• Juridical principle : all taxation should be based on the Act.

Principle imposition of tax

That the state may impose taxes on citizens or to an individual or other entity that is not its citizens, but is linked to the state, of course, there must be provisions that govern them. For example in Indonesia, as expressly stated in Article 23 paragraph (2) of 1945 Act that any tax to finance specified by law. To be able to establish a taxation legislation, necessary principles or foundations that will be the foundation of the state to impose a tax.
There are some principles that can be used by the state as a principle in determining the authority to impose taxes, especially income tax. The main principle is most often used by the state as the basis for taxing is:

1. The principle is called the principle of domicile or residence (Domicile / residence principle): based on the principle of the state will impose a tax on the income received or accrued by the individual or entity, if for tax purposes, an individual is a resident (resident) or domiciled in the country or if the entity is domiciled in the country concerned. In this regard, no question of where the income will be taxed is coming from. That is why the countries that follow this principle, the system of taxation of the population it will incorporate the principle of domicile (residence) with the concept of the tax on his income earned in that country as well as income earned abroad (world-wide income concept) .
2. The principle sources: the State adheres to the principle sources will impose a tax on the income received or accrued by the individual or entity only if the income will be taxed was earned or received by an individual or body concerned of the sources in the country. In principle, it is not a question of who and what the status of the person or entity who obtained such income for the foundation are imposition tax object or tax arising from that country. Example: Foreign workers working in Indonesia, from Indonesia's earned income will be taxed by the government of Indonesia.
3. The principle of nationality or principle called the principle of nationality or citizenship (nationality / citizenship principle): In this principle, which is the basis of taxation is the citizenship status of the persons or entities that earn income. Based on this principle, it does not matter from which income will be taxed from. As well as the principle of domicile, taxation system based on the principle of nationality was done by combining the nationality principle to the concept of taxation on worldwide income.