General Principles of Taxation Practice Flashcards

Comprehensive vocabulary flashcards covering the general principles of taxation, including inherent powers, types of taxes, and administrative issuances.

Revenue Bill Origination

The constitutional requirement that a bill proposing to increase taxes, such as excise tax on tobacco, must originate exclusively in the House of Representatives, though the Senate may propose amendments.

Police Power Primary Justification

The legal justification for an exaction intended to promote the general welfare, even if revenue is incidentally generated.

Bureau of Internal Revenue (BIR) Function

The function of collection and payment of taxation, which is characterized as administrative or executive in nature.

Uniform and Equitable Taxation

A constitutional limitation on the power of taxation requiring that the rule of taxation shall be uniform and equitable.

Commissioner of Internal Revenue (CIR) Interpretation Power

The power of the CIR to interpret tax laws, which is subject to review by the Secretary of Finance.

Eminent Domain

The inherent power of the State to take private property for public purpose provided that the owner receives just compensation.

Police Power Exaction Limit

The amount of exaction under this power is limited to the cost of regulation, issuance of the license, and surveillance.

Power of Taxation Strength

Described as the strongest of all inherent powers because without it, the State cannot survive or dispense its other powers.

Fiscal Adequacy

A principle of a sound tax system where the sources of revenue are sufficient to meet the demands of public expenditures.

Theoretical Justice

A principle of a sound tax system dictating that the tax burden should be proportionate to the taxpayer’s ability to pay.

Administrative Feasibility

A principle of a sound tax system requiring that tax laws be easy to administer, collect, and enforce, avoiding frequent litigation.

Power to Destroy

A phrase describing the degree of vigor with which the taxing power may be employed by the government to raise revenue.

Tax

An enforced contribution exacted pursuant to legislative authority for the purpose of raising revenue for general government expenses.

Special Assessment

An exaction levied only on land based wholly on the benefits derived from a public improvement, and is not a personal liability of the person assessed.

Tax Evasion

Also known as Tax Dodging, it involves the use of fraudulent schemes, pretenses, or forbidden devices to conceal income and underpay taxes.

Tax Avoidance

Also known as Tax Minimization, it is the use of legal tax incentives or structured transactions permitted by law to reduce tax liability.

Statute Ambiguity (Imposition)

When a statute imposing a tax is ambiguous, it should be construed strictly against the government and liberally in favor of the taxpayer.

Statute Ambiguity (Exemption)

When a law granting a tax exemption is unclear, the doubt is resolved strictly against the taxpayer and liberally in favor of the taxing power.

Internal Revenue Laws Nature

These laws are civil in nature (not penal or political) and can be given retrospective application if expressly declared by Congress.

Poll Tax

Also known as Personal or Capitation Tax, it is a tax of a fixed amount imposed on residents of a specific territory regardless of their income or property; non-payment results in no imprisonment.

Ad Valorem Tax

A tax of a fixed proportion of the value of the property being taxed, requiring an assessment by an appraiser.

Excise Tax (Comprehensive)

In its general sense, a tax imposed upon the performance of an act, the enjoyment of a privilege, or engaging in an occupation.

Direct Tax

A tax where both the impact (legal liability) and the incidence (economic burden) fall on the same person.

Indirect Tax

A tax demanded from one person in the expectation that he shall indemnify himself at the expense of another by shifting the economic burden.

Specific Tax

A tax imposing a fixed sum by head, number, weight, or measurement, requiring no assessment other than a listing or classification.

Proportional Tax

A tax based on a fixed percentage of the amount of property, income, or other basis to be taxed.

Regressive Tax

A tax where the rate decreases as the tax base increases.

Progressive Tax

A tax where the rate increases as the tax base increases, such as graduated income tax rates on individuals.

Lifeblood Theory

The theory stating that taxes are the lifeblood of the government, and without them, the government would be paralyzed for lack of power to activate and operate.

Tax Exemption Concurrence

A constitutional requirement stating that no law granting any tax exemption shall be passed without the concurrence of a majority of all the members of Congress.

Revenue Regulations (RRs)

Issuances signed by the Secretary of Finance, upon recommendation of the CIR, defining rules for the effective enforcement of the NIRC.

Revenue Memorandum Circulars (RMCs)

Issuances that publish pertinent and applicable portions, as well as amplifications, of laws, rules, regulations, and precedents issued by the BIR.

Revenue Memorandum Orders (RMOs)

Issuances that provide directives, instructions, guidelines, and workflows necessary for the implementation of the Bureau's policies, goals, and programs.