TAXATION

CHAPTER II THE TAX SYSTEM 2.1. The concept of tax system 2.1.1. Tax Levies 2.1.1.1. Definition and content of tax levies 2.1.1.2. Technical elements of the tax levies 2.1.1.3. Classification of tax levies 2.1.1.4. Techniques for assessing tax levies 2.1.2. The taxation mechanism 2.1.3. The tax authorities 2.2. Classification of tax systems 2.1. The concept of tax system The tax system is the result of thought, decision and action of the human factor, being originally created to meet financial objectives and later were added and some economic-social objectives. In legal doctrine, the tax system is considered as consisting of all taxes and fees from individuals and legal persons supplying public budgets 1. Another approach on the tax system focuses on defining elements of a system in general and considers the tax system in terms of relations between elements of the composite, as the tax system contains a set of concepts, principles, methods, processes regarding a lot elements (tax base, tax rate, tax subjects) related as a result of design, regulation, assessing and collection of taxes. 2 The tax system is thus a complex system, including in its structure the following three components: all taxes, fees and other tax revenues that the State, through its specialized institutions, receives according to the tax legislation; taxation mechanism that includes the methods, techniques and tax instruments needed to assess and collect taxes, fees, contributions and other sums owed to the general consolidated budget; tax authorities, without which the tax system would remain inert, being the engine for implementing a tax mechanism.

1 Condor I., Drept financiar, Editura Regia autonom Monitorul Oficial, Bucureti, 1994, p.122; 2 Corduneanu Carmen, Sistemul fiscal n tiina finanelor, Editura Codecs, Bucureti, 1998, p.22;

TAXATION
2.1.1. Tax Levies The tax levies are the total financial resources taken out by the state from the private sector, through financial transfers in the form taxes, fees (charges) and contributions. 2.1.1.1. Definition and content of tax levies As a result of synthesizing the many concepts and approaches in theory and practice of taxation, the tax was given the following definition3: a type of tax levy in favor of the state without a direct and immediate compensation, non refundable, on the income or wealth of natural and legal persons, in order to complete the revenues needed to finance the public needs. A brief analysis of this definition allows us to easily detect the general characteristics of taxes: taxes are basically a financial contribution, collection in cash being determined by the fact that public expenditure (covered mainly by collecting taxes) shall be made in cash; taxes are a compulsory contribution, so that all natural and legal persons benefiting from public goods must participate, according to their income or wealth, to the formation of public funds; tax is a non refundable levy, meaning that the amounts paid by the taxpayers do not have a direct and immediate benefit to the tax payers, contributing to the formation of the society's general funds, funds used to cover public expenditures to the benefit of all members of society; tax is assessed on the basis of legislation, meaning that any tax is levied only according to the law; Finally, the tax is due only for earned income and property held, for the goods that they produce or distribute or for services they provide, which means that the tax subjects (taxpayers) owe tax only if they earn taxable income as defined by law and when they purchase, hold or produce goods, provide services or perform activities which, according to the law, are taxable.

The tax levies include, beside taxes, the fees (charges), defined as payments made by individual or legal persons for different services performed by public institutions.
3 Talpo I., Enache C., Fiscalitate aplicat, Editura Orizonturi Universitare, Timioara, 2001, p.25-26.

TAXATION
Taxes are paid by individuals or legal persons for certain acts performed or services provided at their request and for their benefit by certain state authorities, public institutions or other persons treated as such. Charges are very similar to taxes because both form public revenues that are collected throughout the fiscal year to the public budget. However, since the legal grounds and purposes are different, charges are different from taxes, presenting the following characteristics: random nature, meaning that they are due and payable only by those asking for the fulfillment of some measures, namely the provision of services by state institutions; certainty of paying subjects is conditional upon a request to provide a service or to perform a specific service by a public entity; taxes are a payment equivalent to the acts, services or activities performed by state entities or public institutions; are imposed on taxpayers in order to cover the costs incurred by state or by public institutions for providing the services requested by individuals and legal persons; are advance payments, i.e. they must be paid when applying for an document or service to be performed by a state entity or public institution; are unique in the sense that for the same act or service performed or rendered a person is liable for the tax only once. The tax levies, beside taxes and fees include a special type of levies, known as contributions. Unlike taxes, these are levied in connection to specific tangible benefits (economic, social and public) that the state provides to natural or legal persons compulsory. Contributions are similar to charges since they appear in connection with a benefit, but are different from them by lack of voluntary commitment as they are not requested but are established by law. Since there in no equivalence between the benefits provided by the state and the value of the mandatory contribution, they are similar to taxes. To distinguish them from other types of contributions, they can be considered participative contributions, since the payers are participating to finance a service from which it is considered that they will receive a potential advantage.