The essence of taxation is a special distribution relationship formed by the state collecting goods or money from economic units and individuals free of charge according to law. This distribution relationship reflects the economic relationship and interest relationship between the state and various classes and strata, which is embodied in the following aspects: the main body of distribution is the state, which is based on state power; The object of distribution is social surplus products. No matter who pays taxes, all tax sources come from the national income created by the workers in that year or the social wealth accumulated in previous years. The purpose of distribution is to serve the realization of state functions; The result of distribution is bound to benefit the ruling class, but not the ruled class, because taxation will always serve the interests of the ruling class. Different socio-economic systems and different national natures determine the nature of taxation in different countries.

The essence of taxation is a specific distribution relationship between the state and social groups and their members as the main body of power in the distribution of fiscal revenue. It is an integral part of the whole product distribution relationship and the whole social production relationship.