TAXATION SLIDE 1

Tax Reform for Acceleration and INclusion Law

T R A I N

Power Of Taxation

To exact an enforced contribution upon person, properties, or rights for the purpose of generating revenue for the use and support of the government

Power Of Eminent Domain

To expropriate private properties for public purpose in return of a just or reasonable compensation

Police Power

To promote general welfare of the people by limiting or regulating the rights or properties

Lifeblood Theory.

It is said that “taxes are what we pay

for a civilized society”. Without taxes, the government

would be paralyzed for lack of the motive power to

activate and operate it.

Necessity Theory.

The government cannot exist without

taxation. It is for this reason that taxes are considered

the state’s necessity.

Benefits-Protection Theory.

Taxation is described as a

symbiotic relationship

whereby in exchange of the

benefits and protection that

the citizens get from the

government, taxes are paid.

FISCAL ADEQUACY

Sources of revenues must be adequate to meet government expenditures

EQUALITY OR THEORETICAL JUSTICE

Proportionate distribution of the tax burden

ADMINISTRATIVE FEASIBILITY

Reasonable and convenient enforcement, and just and effective

administration

plenary

(everything is present

and included);

unlimited

(it can tax anything, any

amount, and in any place);

comprehensive (it covers all

(it covers all things)

supreme

(it is the strongest power).

Tax situs

refers to the territorial jurisdiction of the

government where it has the authority to impose its

taxation power which is to levy and collect taxes on

persons, properties or rights.

MOBILIA

SEQUUNTUR

PERSONAM

Residence or

Domicile

LEX

REI

SITAE

Location of Property

LEVYING OR IMPOSITION OF TAX

Legislative process of determining the persons, properties, transactions or

rights to be taxed, the sum to be raised, the tax rate to be imposed

*Legislative | Congress (Senate and House of Representatives) – makes the tax laws

*Executive | President, Vice President, & Cabinet – implements the tax laws

*Judicial | Supreme Court & Other Courts – evaluates the tax laws

ASSESSMENT AND COLLECTION OF TAX

Manner or procedures of enforcing the tax obligations of the taxpayers

Department of Finance (Carlos Dominguez)

Bureau of Internal Revenue – National Taxes (Caesar Dulay)

Bureau of Customs – International Taxes

Local Government Unit – Local Taxes

Taxes

are considered the burden or the enforced

contribution imposed by the government based on its power

of taxation, upon persons, properties, or rights.

Personal Taxes or Capitation Taxes.

Taxes imposed on persons who are

residents of particular territory (Community Tax)

Property Taxes.

Taxes imposed upon the taxpayer’s property, real or

personal, situated within the territorial jurisdiction of the state (Real

Property Tax)

Excise Taxes or Privilege Taxes.

Taxes imposed on the taxpayer’s exercising

their rights and privileges of performing an act or engaging in an occupation.

(Personal Income Tax and Corporate Income Tax)

National Taxes.

Taxes imposed by the national government enforced by or

through the BIR and BOC (Income Tax, Custom Duties and Tariffs, and Value

Added Tax)

Local Taxes.

Taxes imposed by the local government unit such as barangays,

cities, and municipalities (Real Property Tax and Community Tax)

General Taxes.

Taxes imposed for general purposes and the proceeds of

which go to the national or general fund (Personal Income Tax)

Special Taxes.

Taxes imposed for special purposes and the proceeds of

which go to certain special funds (Excise Tax – Sin Tax)

Direct Taxes.

Taxes imposed upon persons directly bound to pay the tax,

which cannot be passed or shifted to other person for payment (Personal

Income Tax)

Indirect Taxes.

Taxes imposed upon persons liable to pay the taxes but which

are permitted by law to be shifted or passed on to other persons for

payment (Value Added Tax)

Specific Taxes

. Taxes imposed upon property which amounts are determined

based on volume capacity or any physical unit of measurement – per kilo, or

per liter (Excise Tax on Liquors)

Ad Valorem Taxes.

Taxes imposed upon property which amounts are

determined based on the sales price or other specified values (Value Added

Tax and Real Property Tax)

Progressive Taxes.

Taxes imposed upon persons, properties, or rights which

amount of tax increases as the bracket or layer increases – direct (Personal

Income Tax and Corporate Income Tax)

Regressive Taxes.

Taxes imposed in which amount of tax decreases as the

bracket or layer increases – indirect (At present, there is no regressive tax

in the Philippines)