The tribute is a payment that the State requires from its citizens in order to finance their activities and / or economic policies.
A tribute is a pecuniary benefit that the State or Public Administration can demand from the citizens of a country or territory. The amount and period of payment of the taxes is specified by law and failure to comply may lead to monetary penalties and / or jail.
In the case of Spain, the so-called “General Tax Law” (LGT) comprises the general rules and principles of the country's tax system. It regulates the relations between the Public Administration and taxpayers.
According to the LGT, taxes are defined as: «... public revenues that consist of financial benefits demanded by a public Administration as a consequence of the realization of the factual assumption to which the Law binds the duty to contribute, with the primary purpose to obtain the necessary income to sustain public expenditures. "
Taxes, in addition to being means to obtain the necessary resources to sustain public expenditures, may serve as instruments of general economic policy and attend to the realization of the principles and purposes contained in the Constitution ".
Characteristics of the tributes
The tributes have the following basic characteristics:
- They are established by law.
- They are mandatory or coercive. They are imposed unilaterally by the State or Public Administration.
- They are enforceable and their non-compliance is punishable.
- They are ordinary, that is, they are regularly perceived.
- Pecuniary, that is, they are paid in cash or its equivalent. In times past they could also be paid in kind (wheat, cattle, etc).
- They are contributory, helping to finance the activities of the State and economic policies.
Types of tributes
The tributes can be classified into three large groups:
- Taxes: These are taxes that are required without an established consideration, that is, without the taxpayer knowing for sure what the resources will be spent on. The tax base of the taxes, that is, to which the tax is applied, are the activities that demonstrate the ability to pay of a taxpayer such as business, income, consumption, etc. Examples: Income tax (IRPF), consumption tax (VAT) or special tobacco taxes.
- Fees: It is the payment for a public service, for example, the fees charged for the homologation of titles.
- Public prices: It constitutes a payment for a public product or service. The difference with the rates is that in this case there is a private alternative.
- Contribution: Tax levied on the benefits obtained or the appreciation of the value of the assets of a taxpayer as a result of the performance of public works or the creation or expansion of public services. Thus, for example, when a road or a subway station is built, the value of the nearby land increases and this can give rise to the demand of a tribute.
Purpose of the tributes
Taxes tend to make up the bulk of the income of modern states. The resources obtained through them are used not only to finance the State's own activities (such as payment to public officials, office expenses, etc.), but also to finance some economic and social policies (such as unemployment benefits, investment of public schools, etc).
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