Securities are unconditional obligations of the sovereign state.
It is backed by the full taxing power of the sovereignty. Therefore, government securities are practically free from default. Government agencies, Local Governments and government-owned or controlled corporations may float securities but these are not labeled as Treasuries. GS discount or coupons are subject to twenty percent final income tax which is withheld upon floatation of Treasury Bills or upon payment of the coupon for Treasury Bonds. No other tax is imposed on the secondary market buyer.