Basic Taxation
Basic Taxation
Basic Taxation
Taxation, definition
The inherent power of the state
Taxation, nature
The power of taxation is based on the theory that no government can exist without taxation, thus taxation is an important necessity. The theory is that taxes are imposed upon persons, properties or rights for the support of the government in return for the general advantages and protection which the government provides the taxpayers.
Taxation, basis
The basis of the power to tax is the reciprocal duties of protection and support between the state and those that are subject to its authority.
Taxation, purposes
The principal purpose of taxation is to raise revenues for the use and support of the government to enable it to carry out its functions.
The secondary purpose of taxation is to serve a s means to contend social, general welfare and economic development.
Taxation, Scope
The scope of the power of taxation is plenary or unlimited comprehensive and supreme restricted only by the constitutional and inherent limitations
Fiscal adequacy
Equality or Theoretical Justice
Administrative Feasiblity
Fiscal adequacy
This means that the sources of revenues as a whole must be adequate to meet the expenditure of government regardless of the business economic conditions.
or
Administrative Feasibility
This means that the tax laws must be capable of reasonable and convenience enforcement, just and effective administration.
Constitutional limitations
1. Due process of law. 2. Equal protection of the law. 3. No imprisonment for non-payment of a poll tax. 4. Rule of taxation shall be uniform and equitable. 5. Exemption from taxation of charitable institutions, churches, parsonages, or convents, appurtenant thereto, mosques, non-profit cemeteries, and all lands and buildings used exclusively for religious, educational or charitable purposes.
Constitutional limitations
6. No public money/property shall be used for any religious/private purposes. 7. The majority of all members of the national assembly or congress shall pass granting of tax exemptions. 8. Non-impairment of the jurisdiction of the Supreme Court on tax cases. 9. The Philippine President has the power to veto any item in a tax bill approved by Congress.
Inherent limitations
1. Taxes may be levied only for public purpose. 2. Non-delegation of the power to tax except to local government and in matters of collection and enforcement. 3. Exemption from taxation of government entities. 4. Tax laws must be within the states territorial jurisdiction. 5. Tax laws must be subject to international comity, convention and agreements. 6. Prohibition of double taxation.
3. Police Power the inherent power of the state to promote the general welfare of the people by limiting or regulating the rights or properties of any person.
Tax Shifting
is the act of legitimately passing on ones liability to another person in accordance with the provisions of the tax laws.
Situs of Taxation
Refers to .the territorial jurisdiction of government where it has the authority to impose its taxation power which is to levy and collect taxes on persons, properties or rights. It literally means the place of taxation
1. Resident Filipino is taxable on all income derived from sources within and without the Phil. 2. A non-resident Filipino is taxable only on income derived within the Phil. 3. An overseas Contract worker* is taxable only on income from within the Phil. 4. An alien individual, whether a resident or not of the Phil, is taxable only on income from within the Phil.
* a Filipino seaman who receives compensation for services abroad as a member of the complement of a vessel exclusively in international trade is an OCW.
1. A domestic corporation is taxable on all income derived from sources within and without the Phil 2. A foreign corporation, whether engaged or not in trade or business in the Philippines, is taxable on income derived from sources within the Phil.
Double Taxation
Means the act of taxing the same taxpayer, his person, property or right, twice for the same kind and character of tax by the same taxing authority within the same jurisdiction for the same purposes during the same taxable period
Double Taxation
There is no constitutional limitation on double taxation. It is merely subject to the inherent limitation, hence it is not prohibited, legally speaking. If double taxation occurs, the taxpayer may seek relief under the uniformity rule of taxation or under the equal protection of the law guaranty under the Constitution.
Tax, definition
Tax is defined as a burden or enforced contribution imposed by government based on its inherent power of taxation upon persons, property or rights.
Taxes as to Purpose
1. General Tax imposed for general purposes, the proceeds of which goes to the national/general funds. Ex. Donors tax 2. Special Tax imposed for special purposes, the proceeds of which go to certain special funds. Ex. Road Users tax
Taxes as to Liabilities
1. Direct Tax imposed upon persons who are primarily burdened to pay them. Ex. Estate tax 2. Indirect Tax imposed upon persons liable to pay said taxes but are permitted by law to shift the burden to others. Ex. Value Added tax
Tax v. Toll
Tax Toll
broader in meaning
Tax v. Debt
Tax based on law non-assignable generally payable in terms of money cannot be subject to the right of offset no interest except when delinquent Debt based on contract assignable payable in money or property
Self-Assessment
-Compute you own tax -File your own return
-Pay tax as you file return (the balance after deducting taxes withheld for the same taxable period)
End of presentation