Module 01 General Principles
Module 01 General Principles
Introduction and
General Principles
NOTHING IN THIS
WORLD IS
CERTAIN EXCEPT
DEATH AND
TAXES!!!
DEFINITIONS
It is an enforced contribution
It is proportionate in character
It is generally payable in money
It is levied on persons or property
It is levied by the state which has jurisdiction
over the person or property
It is levied by the law-making body of the state
It is levied for public purposes
NATURE OF THE POWER OF TAXATION
It is inherent in sovereignty
It is legislative in character
It is subject to constitutional and inherent
limitations.
This determines how efficient the tax system is in performing its functions. It
does not determine the validity or legality of the taxes imposed.
CLASSIFICATIONS AND DISTINCTIONS
As to subject matter
Personal, Poll or capitation
Property
Excise
As to determination
Specific
Ad Valorem
CLASSIFICATIONS AND DISTINCTIONS
As to purpose
General, fiscal or revenue raising
Special or regulatory
As to scope
National
Municipal or local
As to graduation or rate
Proportional
Progressive or graduated
Regressive
CLASSIFICATIONS AND DISTINCTIONS
As to determination
Specific
Ad Valorem
As to purpose
General, fiscal or revenue raising
Special or regulatory
LIMITATIONS ON THE POWER OF
TAXATION
SHIFTING
Where the burden of paying the tax is shifted to another person
Taxpayer
The one who
incurs the tax
Shifts Shifts
Charges Charges
Seller Buyer
ESCAPES FROM TAXATION
With no Government Revenue Loss
CAPITALIZATION
occurs if the burden of the tax is incorporated in the value of long-term assets
Taxpayer Buyer
Sells
Pays the
Makes the tax
same price
as part of the
but absorbs
cost at reduced
the tax
price of item
Taxpayer Company
ESCAPES FROM TAXATION
With no Government Revenue Loss
TRANSFORMATION
occurs when the taxes are “offset” by the seller with some benefits
Taxpayer Buyer
Sells
Avoidance means anticipating the tax Evasion does nothing to avoid the tax
exposure and making plans to avoid exposure from occurring but instead
the tax exposure from occuring misrepresent the transaction to avoid
paying the tax
ESCAPES FROM TAXATION
With Loss of Government Revenue
EXEMPTION
Exemption is the grant of immunity to a particular persons or corporations or to persons or
corporations of a particular class from a tax which persons or corporations within the same
state to taxing district are obliged to pay
CONSTRUCTION OF TAX LAWS
Income Taxes
Transfer Taxes (Estate and Donor’s)
Value-Added Taxes
Other Percentage Taxes
Excise Taxes
Documentary Stamp Taxes
Such other taxes may be promulgated
Module 01
Introduction and
General Principles
Tax Reforms in the Philippines
TAX REFORMS IN THE PHILIPPINES
The first two laws were passed during his term and a third law
was passed by the incumbent President Ferdinand R. Marcos.
These laws are:
• Republic Act 10963 – or the TRAIN Law
• Republic Act 11534 – or the CREATE Law
• Republic Act 11976 – or the EOPTA Law
R.A. 10963 – THE TRAIN LAW
GENERAL CONCEPTS
INTRODUCED BY R.A. 11976
NEW CLASSIFICATIONS OF TAXPAYERS
All taxpayers who are subject to any internal revenue tax shall
register once, either electronically or manually, with the
appropriate Revenue District Office:
Within 10 days from date of employment, or
On or before the commencement of business, or
Before payment of any tax due, or
Upon filing of a return, statement or declaration as
required by the tax code
Upon initial registration, the taxpayer shall be issued a Tax
Identification Number which shall be needed to be disclosed
whenever the taxpayer files any return, statement or other
document with the tax office.
The registration shall update such registration as may be
needed to take into account each type of internal revenue tax.
REGISTRATION OF TAXPAYERS
ANY QUESTIONS?