Sittie Lyka H.

Abdulkadir Pampangan

MAED-AS- 2

Ed 608 - FISCAL MANAGEMENT IN EDUCATION

Prof. Sema G. Dilna, EdD

Reaction Paper on Tax Base and Tax Rate

Tax base and tax rate are important components of tax-- involuntary fees levied

on individuals or corporations and enforced by a government entity in order to finance

government activities (Uradu, 2020). A tax base is a total amount of assets or income

that can be taxed by a taxing authority, usually by the government. It is used to

calculate tax liabilities (Kagan, 2019). Meanwhile, a tax rate is the percentage at which

an individual or corporation is taxed (Segal, 2019). Hence, it is important to ensure that

the tax system of a country is maintained and monitored accurately in order to ensure

economic growth.

Before conducting our research for our report about tax base and tax rate,

I was not actually that attentive about the tax system of our country. However, after the

readings we have gathered about tax base and tax rate, I realized the important role of

tax in upholding the economy of the state. Revenues from the Personal Income Tax

Rate are an important source of income for the government of Philippines (Philippines

Personal Income Tax Rate, 2020). Relating to the current state of the economy today, it

can be said that the Philippines is suffering from low tax revenues due to the pandemic.

According to National Economic Development Authority (NEDA) acting Director

General Karl Kendrick Chua, the Covid-19 pandemic caused the country to have the

lowest GDP growth rate of negative .2%, the first recorded recession after 1998. This
fall on the economy is due to severe lockdowns, unemployment, closed business

operations and mass testing conducted to fight the spread of the virus. These

procedures might have impacted the country negatively, but they are needed to ensure

public’s safety.

The situation that we are experiencing today portrays the significance of tax in

maintaining the country’s economy. Without the tax revenues, it will be hard for the

nation to provide for the needs of its constituents. In Philippines, the Personal Income

Tax Rate is a tax collected from individuals and is imposed on different sources of

income like labour, pensions, interest and dividends Philippines (Philippines Personal

Income Tax Rate, 2020). Revenues from taxes were used to accommodate the needed

budget of the country. Therefore, tax is an important mechanism to ensure the

economic growth of the country and helps it prevent collapse.