WHAT IS THE COLLECTION OF TAXES, FEES AND CHARGES FOR - ECONOMY - 2024

The collection of taxes, fees and charges, also called fiscal collection, serves as a method of financing for the governments of the countries. The exact definition of tax collection is that carried out by an agency, normally a State, with the objective of obtaining capital to be able to later invest it.

Tax collection today has become a basic pillar in the economies of many countries to alleviate public spending.

Origin and purpose of the collection of taxes, fees and charges

Tax collection dates back to Roman times, where the empire's war campaigns were financed from public coffers that were filled thanks to the money collected.

In the past, the State owned many companies with different activities. Normally they were activities in which their capital returns were not very large, so that no entrepreneur ventured to undertake that economic activity.

Over the years, the increase in communication and the opening of borders, the State was getting rid of companies that were not entirely economically profitable. That is why tax collection for the State has occupied a privileged place in the fight against public spending.

While it is true that tax collection is an important fact in a welfare state, problems are often brewing around it.

Although many States have chosen to take measures to control the administration, it does not prevent cases of corruption, illicit enrichment or losses due to incorrectly carried out investments from appearing.

Tax collection measures the amount of money obtained through taxes, fees and levies that will be obtained to finance the public services of the State.

Uses of tax collection

The best way of correct fiscal management is through the spending route. In the worst case, if public spending exceeds taxes collected, we are in a situation of fiscal deficit.

For a country, a fiscal deficit situation is dangerous because it can devalue its currency against the rest of the world.

Most of the spending of a State should be collected through indirect taxes levied on consumption (higher quotas for luxury products) and taxation of large companies that are located in the country.

Every year, the government prepares a budget for the State in which it is specified to which items the public spending will go.

Mainly it should go to education and health. But since the time of crisis, all the things that should have been invested with tax revenues have been the first to be cut.

The categories that are financed through tax collection are public debt, pensions for the unemployed and retired, education, health, social assistance, and the armed forces and law enforcement.

The budgets of a state are set so that the government meets the objectives it has set through collection.

A small problem arises, every time there is a change of government, you find yourself with a complex fiduciary structure and changing it takes a long time.

Public financial activity must meet the satisfaction of certain social needs.

For this, the government must not only keep tax collection as high as possible, but must keep it at a stable limit that minimizes the negative impact on consumers.

For example, if the government raises the contribution values ​​to Social Security due to earned income, many people will stop working, since it is more profitable for them to stay at home without working than paying more taxes and seeing their salary reduced.

Every year it is necessary for the council of ministers to accept the new budgets and be ratified by the congress.

Collection types

The collection is done through three ways, taxes, fees and levies.

Taxes

Taxes are mandatory fiduciary obligations for the entire population.

They consist of payments or taxes of a pecuniary nature in favor of a tax creditor. These have three purposes, tax purposes, which they perform to pay for public services.

Extra-fiscal purposes that satisfy the public interest and punish an action, such as the tobacco tax. And the mixed ends that combine the two.

There are two types of taxes: direct and indirect. Direct taxes are applied directly to the economic capacity of the taxpayer.

In turn, indirect taxes are those that do not take into account the economic capacity of the person who has to pay them

The types of taxes that generate the most revenue for the State are:

VAT, Value Added Tax

It is an indirect tax, which is levied on consumption. Taxing a small part of the price to the State. It is calculated on the basis of prices of products and services and in large commercial activities.

It is supposedly a progressive tax so that all the parties involved should pay a part, that is, producers and consumers.

The problem is that the producers count it as a production expense and it makes the final product more expensive, ending up bearing the tax burden exclusively on the final consumer.

Personal income tax, personal income tax

This is a direct tax that is levied directly on people and the income they have earned over the course of a year. This is the largest source of tax financing in our country.

Corporation tax

This tax is levied on the economic activity of a company. Usually a small one.

There are also taxes on inheritance, inheritance and transfers, as well as taxes on alcohol, tobacco, etc.

Fees and levies

The rates are a tribute that is paid for the use of a public service. They are a fixed amount for each operation that you want to perform. Such as the secretarial fees of a public university, college, etc.

Liens are tax charges that are applied to a piece of furniture or tangible goods through a fixed or variable fee. For example, the IBI would be a lien

References

1. MARTÍN, Fernando. The determining factors of tax collection. Magazine of the XVI National Seminar of ASAP. Saint Louis. October 2002, 2006.
2. COASE, Ronald H. The problem of social cost, Spanish Public Finance, 1981, no 68, p. 245-274.
3. SPANISH, Public Finance. The development of a tax law, Spanish Public Treasury, 1971, no 8, p. 168-236.
4. SPANISH, Public Finance. Accounts of the Public Administrations, Spanish Public Treasury, 1971, no 10, p. 283-293.
5. RESTREPO, Juan Camilo. HACIENDA PÚBLICA, 10. U. Externado de Colombia, 2015.
6. VILLAREJO, Avelino García; SÁNCHEZ, Javier Salinas. Manual of General Public Finance and Spain. 1994.
7. BUCHANAN, James M.; BUCHANAN, James M. Public finance in a democratic process. Aguilar,, 1973.