TAXATION- may be defined as a state Power, a legilative process, and a mode of gor't cost distribution. As a utate power - taxation is an inherent power of the State to enforce a proportional contribution from its vubject for public purpose the state to enforce proportional contrations from its vubjeds for pablic purpase. 3. As a mode of cost distribution - taxation is a mode by which the state allocates its casts burden to its wubjects who are benefited by tir upending. 2 PURPOSE OF TAXATION 1- PRIMAR) - revenue fiscal purpose - to provide tunds property with which to promote the general welfare & the protection of tr citizens & to enable it to finance its multifarious activities. 2. SECONDARY - is To raire revenue for the upport of gor't taxation is often employed. as a devise for regulation/ control • Compenratory - to reduce vocial inequality • Regulatory - regulation control

E. As to Ratè

1. Proportional Tax - flat /fired rate. lex. estate donors,
   Vat that has fixed percent).

2. Progressive /Gradvated Tax - the higher the Tax rate

the highèr the tax base

1. Regrevrive Tax - the lower the tax rate the
   hight hight higher the Tax base

2. Mixed Tax - this tax manifest tax rater which is a comanation of any of the above typer of tax.

F. As to Imposing Authority

1. National Tax - tax imposed by national government ex. incometax, Estate tax Donors tax, VAT, OPT, Excise tax, Documentary stamp tax.

2. Local Tax - tax impused by the municipal/local govemment ex. Real property tax, Professional fax, Buriners taves, fees, changer / Community tax, tax on banks & other financial institutions

Double Taxation - occurs when the rame taxpayer is

Primary Element for the rame thing.

taxed twice by the rame tax. jurisdiction

same object, same purpose / same type of tox, same tax jurisdiction, rame tax periodi

- vecondary Flements.

TYPES OF DOUBLE TAXATION

1. Direct Double Taxation- ocars when the vame income financial transaction is taxed by two different jurisdictions/ entties

TAX VS. REVENUE

TAX-nefers to the amount impared

Revenve - referr to the amount collected.

TAX US. LISCENSE TAX - no imit

LICENSE - for regulation/ limited

TAX VS. TOL

TAX - demand of rovereignty

TOLL - deman of ownerhip

TAX VS: DEBT

TAX - batre from law

DEBT - base from Contract.

TAX VS. SPECIAL ASSESUMENT

priveleges

TAX impore on burmesser, interests, transactions, riants properties/ SPECIAL ASSESSMENT - Imposed only on land that is being assessed.

TAX VS. • PENALTY

TAX - purpose is to raise revenve

PENALtY → tarpuse is to regulate conduct through punichment

A rupprecion of injurious act.

DATE

LIMITATIONS ON

THE STATES PONER TO TAX

TAX VS. TARIFF

TAX - mandatory financial charge to individuals, bur properties.

TARIFF- impare tawards imported & local goods & vervices.

CLATIFICATION OF TAXES

A. Asto Purparc

1. Fiscal / Revenue tax -imposed for general purpore.

2. Regulatory - impore to regulate business, conducts, acts)
   Transactions.

3. Sumptuary - a tax levied to achieve vome vocial economic
   objectives.

B. As to Subject Matter

1. Personal, poll capitation - a tax on persons uno dre resident of a particular terrtory. ex. poll tax

2. Property Tax - a tax on properties, real / personal

3. Excise /Privelege Tax - towards rightr & priveleges
   ex. inva income tax.

C. As to Incidence

1. Direct Tax -Tax that is pald directly oy an individual organization to the gor r. ex. income Tax

2. Indirect tax. - not directly paid by an individual
   bariners to the gov-, but is insteda passed on to conrumers through higher prices. ex. VAT

D. As to Amount

1. Specific Tax - based on

-based on quantity, volume, & weight. & ex. sin tax (tax levied on harmfül goods)

2. Ad Valorem - the tax that is impose to there products are base on valve. lex. esstate, jewelry).

THFORIES

'OF TAXATION

Necarity Theory-to

prererve the states rovereignty

-a means to give for protection e facilities ex. baric needs

1. Life blood Theory - taxes are the lifeblood of the government

2. Benefit Protection Theory/Symbiotic Relationship Theory

• pays taxes
  in returns the gov't protecto u in any
  calamity

• reciprocal duties of gov't & taxpayers.
  CHARACTERISTICS OF TAXATION

1. Entoreed Contribution - tox is not voluntary + Its importion s in no way dependent upon the will consent of the person being taxed. (MANDATED)

2. Levied for Public Purpose - taves are spent to rupport gor't

3. Generally Payable in Money - the gort, in the exercire of its
   civil remedy in collecting the tax aue may, by distraint of perronal property/ by levy of real property, take the same to vatioy the tax lidality if the tax payer has no money

4. Exclusively Levied by legirlature - the power to tax is vested into the congrers.

5. It 15 Levied on persons & property by the state which has jurisdiction

Ge. Proportionate in Character- the hare of the taxpayers on

the public burden is essentially based on ones ablity to pay .

ditribition channel that exhibits forivert hifting/backward hifting

1. Capitalization - pertains to the adjustments of the value of an arset cause by changes in tax rates.

2. Transformation - pertains to the eliminations of warte losses by the tax payer to form ravings to compensate for the tax imposition or increase in taxes.

4. Progregive System of taxation- tox rate increase ar the tax
base increases

- higher valary-higher tax

5. Non- imprironment for non payment of debt poll Tax.

G. Non- imparment of obligation* contract - the State mould
ret an example of good faith among its conttvents."
i mould not vet aside its obligations trom contracts a the exerase of its taxation power.

1. Free Worrhip Rule - the Phil. gor't adopts free excerase
   of religion & does not subject its exercise to taxation. Stithes /offerings but does not extend to income from properties /activities of religious institions that are proprietary con or commercial in nature:

2. Exemption of religious chantable entities, non-profit cemeteries churches, and masque from property taxes -

3. Non- appropriation of public

funds property for the benefit

of any church, sectors/rustem of religion - intended to highlight the separation of religion and the State.

1. Exemption from taxes of the revenues & assets of non-protit, non-stock educational institutions. grants, endowments, donations, or contributions tor equeational purpores)

2. Concurrence of a majority of all members of Congrers for the passage of a law granting tax exemption - To pass a law granting tax exemption, a majority of all members in both the House of Repreventatives and the Senate must approve I.

local services like schools & road maintenance.

4. Progregive System of taxation- tox rate increase ar the tax
base increases

- higher valary-higher tax

5. Non- imprironment for non payment of debt poll Tax.

G. Non- imparment of obligation* contract - the State mould
ret an example of good faith among its conttvents."
i mould not vet aside its obligations trom contracts a the exerase of its taxation power.

1. Free Worrhip Rule - the Phil. gor't adopts free excerase
   of religion & does not subject its exercise to taxation. Stithes /offerings but does not extend to income from properties /activities of religious institions that are proprietary con or commercial in nature:

2. Exemption of religious chantable entities, non-profit cemeteries churches, and masque from property taxes -

3. Non- appropriation of public

funds property for the benefit

of any church, sectors/rustem of religion - intended to highlight the separation of religion and the State.

1. Exemption from taxes of the revenues & assets of non-protit, non-stock educational institutions. grants, endowments, donations, or contributions tor equeational purpores)

2. Concurrence of a majority of all members of Congrers for the passage of a law granting tax exemption - To pass a law granting tax exemption, a majority of all members in both the House of Repreventatives and the Senate must approve I.

NATURE

OF

1. Inherent Power of the State

2. Legislative in Character

3. Subjected to Inherent & Constitutional Limitations

3 BRANCHES OF THE GOV+

1. Executive - President, his/her adrisor & various ep't l agencier.

2. Legislative - reponsible for making laur within a country

• upper house - Senate lower house - House of Representatives

3. Judicial - in charge of deciding the meaning of knur, haw to apply them to real vituations:

- Supreme Court

3 VOUND TAX VYSTEM

1. Fiscal Adequacy - revenue only exceeds the expenser of
Ane Phil.

Adminidrative Feasibility-Fox hout be fearible/avaitable

- law murt be clear & concise.

3. Theoretica Vustice - the tax birden hould be proportionate
to the taxpayer's ability to pay (ability to pay. principle)
INHERENT POWER OF THE STATE

Taxation- strongest power of the State. (there is tax even without law because taxation is inherent)

• Police Power - promotes public welfare. ex- liscense

, bus. permits,

passport renewal

, confiscates muggled goods)

• Power of Eminent Domain- taking of private property for the benefit of general public after paying compensation.

2. ndirect Double Taxation - occirr when income is taxed
more Ahan once, not directly but through different stages entities.

ESCAPES FROM TAXATION - the means available to taxpayer to limit /even avaid the impact of taxation.

• CATEGORIES OF ESCAPES FROM TAXATION

A. Those that result to lass of government revenve

1. Tax evasion- also known ar tax dodging, rofersto any act /trick that tends to illegally reduced / avoid the payment of tax.

2. Tax avoidance - also known as tax minimization referr to any actr/tricks that reduces /totally escaper taxes by any legally permissable means.

3. Tax exemption -also known as tax holiday, referr to immunty, privelege /freedom from being vubject to tax. which others are rubie to. Tax exemption may be granted by the Camitution, law /contract.

B. Thare that do not result to loss of government revenve

1. shifting - transferring tax burden to other taxpayers

9. Forward rhifting - chifting of tax which follouer normal flow of distribution ex trom manufacturer To

whokralers /retailers to consumers)

b. Backward hifting - reverse of forward whifting

- common with non-ersential commodities where ty buyer haver considerable market power l commodities with numerous substitute products.

c. Onward shifing - any tax hifting in the

1. SITUS OF TAXATION

   SUBJECT MATTER	SiTUS
   1. Person / people Residence of Taxpayer	Residence of tax payer
   2. Rea Property	Tax is bared on Location
   	Tax is based on Location
   3- Tangible persora property	Based on the domicile of the owner
   4. Intangible personal property	Residence/Citizenship Sarce of in cone
   5. Income 6. Business	Place of the Buriness