BMGT 28

Question 1

defined as the process by which the sovereign, through its law-making body raises revenues used to defray government expenses
It is the mean of the government in increasing its revenue under the authority of the law, purposely used to promote welfare and protection of its citizenry.
Process of government to raise revenue
Protection of general people

Answer 1

Taxation

Question 2

it is an imposed contribution from person and properly levied by the law-making body purposely to support the government and all public needs.

Answer 2

Tax

Question 3

Inherent power of the state to imposed and demand contributions upon person and properties or rights for the purpose of generating the revenues for public purposes.

Answer 3

Concept of Taxation

Question 4

The individual should be taxed in proportion to the benefits they receive from the government and that taxes should be paid by those people who receive the direct benefit of the government programs and projects out of the taxed paid

Answer 4

The benefit principle

Question 5

That taxes should relate with people’s income or the ability to pay that is greater income or wealth and can afford to pay more taxes should be taxed at higher rate than people with low wealth and low income

Answer 5

Ability to pay principle

Question 6

That income wealth and transaction should be taxed at a fixed percentage, that is people who earn more and buy more will not pay higher rate of taxes.
Example: value added tax or VAT

Answer 6

The equal distribution principle

Question 7

Meaning the government takes an amount of
money from a person which is indirect proportion to his income. Ex. Ben salary is 10,000pesos and the government is deducting 10% of his salary for tax. After a year his income increases to 15,000pesos and the
governments now deducts 12% of his salary for tax.

Answer 7

Tax is proportional

Question 8

regardless of your status in life, you will pay higher rate of tax

Answer 8

Tax is regressive

Question 9

all wealthy people have higher tax; when importation in the country rises.

Answer 9

Tax is progressive

Question 10

What is the significance of taxation?

Answer 10

Primary purpose: generates funds or revenues use to defray
expenses incurred by the government in promoting the general
welfare of its citizenry.
Other purposes:
■ to equitably contribute to the wealth of the nation
■ to protect new industries
■ to protect local producers

Question 11

What is the characteristics of taxation?

Answer 11

It is an enforced contribution – mandatory
It is generally payable in cash
It is proportionate in character
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

Question 12

means that the sources of the revenues taken as a whole should be sufficient to meet the expanding expenditures of the government regardless of business conditions, export conditions, trade balances and problem of economic adjustments

Answer 12

Fiscal Adequacy

Question 13

means that taxes levied must be based upon the ability of the citizen to pay

Answer 13

Equitably or theoretical justice

Question 14

the tax system should be capable of being properly and efficiently administered by the government and enforced with the least inconvenience to the tax payer. (Tax payer should have clear understanding about the tax his or her paying.)

Answer 14

Administrative feasibility

Question 15

refers to the tax laws that should be consistent with economic goals and programs of the government.

Answer 15

Consistency and compatibility with economic goals

Question 16

literally means the place of taxation or the country that has jurisdiction to leux a particular tax on person, property, rights or business.

Answer 16

Situs of Taxation

Question 17

what will be taxed?
Example: income and property

Answer 17

Subject matter

Question 18

Examples of these are income tax, property tax

Answer 18

Nature of tax

Question 19

Examples of these are foreign/alien or local citizen

Answer 19

Citizenship of the tax payer

Question 20

territorial boundaries; issuing cedula

Answer 20

Residence of the taxpayer

Question 21

What are the classifications of taxes?

Answer 21

1. As to subject matter
2. As to who bears the burden
3. As to determination of account
4. As to purpose
5. As to scope

Question 22

that there is fix amount upon all person’s residence with a specified territory regardless to their property or occupation
Ex: cedula or community tax certificate

Answer 22

Personal poll or capitation tax

Question 23

refers to one assessed on owned property located within a certain territory on a specified data in proportion to the value in accordance with reasonable methods of apportionment, the obligation to pay is absolutely and avoidable and is not based upon any voluntary action of an individual assessment

Answer 23

Property tax

Question 24

refers to pay any tax which does not fall under the classification of a poll tax or a property tax and embraces every form of burden not load directly upon person or property.

Answer 24

Excise tax

Question 25

refers to tax which is demand from an individual who tends to buy or purchase a goods and services

Answer 25

Direct tax

Question 26

refers to tax paid primarily by a person who can shift the burden upon someone else or who is underknown legal obligation

Answer 26

Indirect tax

Question 27

is a fixed tax or determinate some imposed by the need, number or some standard of weight and measurement and requires no assessment beyond in listing and qualification of the project to be tax

Answer 27

Specific tax

Question 28

is a tax of a fixed proportion of the value of the property with respect to which the tax is assessed and requires the intervention of assessor or appraisers to estimate the value of the property.

Answer 28

Ad valorem tax

Question 29

refers to tax levied to an individual for a general-public purposes

Answer 29

General tax

Question 30

a tax to an individual for a particular or specific purpose

Answer 30

Special tax

Question 31

tax imposed by the state and is effective within the entire jurisdiction

Answer 31

National tax

Question 32

tax imposed by the political subdivision of the state and is effective only within the territorial boundaries

Answer 32

Local tax

Question 33

What are the entities exempted from taxation

Answer 33

Religious institutions
Charitable institutions
Non-profit, non-stock educational institutions
Non-profit cemeteries (public cemeteries)
Government institutions
Foreign diplomats (foreign representatives

Question 34

passing the burden of tax from one person to another

Answer 34

Shifting

Question 35

occurs when the burden of tax is transfer from a factor of production to the factor of distribution

Answer 35

Forward shifting

Question 36

burden of taxes is transfer from consumer to the producer or manufacturer

Answer 36

Backward shifting

Question 37

tax is shifted to 2 or more times either forward or backward

Answer 37

Onward shifting

Question 38

refers to the reduction in price of the taxed object to the capitalize value of future taxes which the purchaser expected to be called upon to pay

Answer 38

Capitalization

Question 39

when the manufacturer or producer upon whom the taxes has been imposed pays the tax and endeavor to himself by improving the process of production

Answer 39

Transformation

Question 40

practiced by the tax payer through illegal or fraudulent means to deceit or lessen the amount of tax

Answer 40

Tax evasion

Question 41

the exploitation by the tax payer of legally permissible methods in order to avoid

Answer 41

Tax avoidance

Question 42

is the grant of immunity or freedom from a financial charge obligations or burden to which others are subjective

Answer 42

Tax exemptions

Question 43

What are the grounds of exemptions

Answer 43

Contract wherein the government is the contracting party. (partnership in government to be able to free from tax)
Public policy – law that says that you are exempted from tax
Reciprocity – exist commonly on the income from dead person

Question 44

What are the kinds of tax under existing laws?

Answer 44

National taxes – taxes imposed by the National Government
National Internal Revenue Code
Tariffs and customs code of the Philippines
Sugar Adjustment Act
Travel Tax
Energy Tax
Republic Acts numbers
Presidential Decrees through Public Acts

Question 45

What are the KINDS OF TAXES UNDER EXISITING LAWS under local taxes?

Answer 45

Local tax code
Real property tax code
Tax ordinance of respective barangays, municipality and provinces

Question 46

What are the AUTHORITIES IN IMPOSING TAX IN THE PHILIPPINES

Answer 46

National Government
Municipal/local government

Question 47

What are the individual tax payers?

Answer 47

• Citizens
- resident citizen
- non-resident citizen
• Alien
- resident alien
- non-resident alien

Question 48

What are the corporate taxpayers?

Answer 48

1. Domestic corporation
2. Foreign corporation
   a. Resident foreign corporation
   b. Non-resident foreign corporation

Question 49

under the constitutions, they are:
Those who are the citizens of the Philippines at the time of adaptation of the Constitution on Feb 2, 1987
Those whose father and mother are citizens of the Philippines
Those born before January 17,1973 of Filipino mothers who elected Filipino citizenship upon reaching the age of majority
Those who are naturalized in accordance with the law

Answer 49

Citizens

Question 50

a Filipino citizen residing in the Philippines

Answer 50

Resident citizen

Question 51

A citizen of the Philippines who establishes to the satisfaction of the commissioner the fact of his physical presence abroad with a definite intention to reside therein
A citizen of the Philippines who leaves the Philippines during the taxable year to reside abroad, either as an immigrant or for an employment on a permanent basis
A citizen of the Philippines who works and derive income from abroad and whose employment thereat requires him to be physically present abroad most of the time during the taxable year

Answer 51

Non resident citizen

Question 52

an individual who is residing in the Philippines but not a citizen, like:
An person who lives in the Philippines without definite intention as to his stay
One who comes to the Philippines for a definite purpose which in its nature would require an extended stay and to that end makes his intention at all times to return to his domicile abroad

Answer 52

Alien

Question 53

an individual who is not residing in the Philippines and who is not a citizen thereof
Engaged in trade or business (NRA-ETB) alien who stayed in the Philippines for an aggregate period of more than 180 days during the year
Not engaged in trade or business (NRA-NETB) include
Aliens who come to the Philippines for a definite purpose which in his nature may be promptly accomplished
Aliens who shall come to the Philippines and stay therein for an aggregate period of not more than 180 days during the taxable year

Answer 53

Non-resident alien

Question 54

covers all except those subject to final tax and capital gains tax

Answer 54

General in coverage

Question 55

Tax on residual profit

Answer 55

Net income tax

Question 56

Applies on year profits or gains

Answer 56

Annual tax

Question 57

required advance taxes (CWT)

Answer 57

Creditable withholding tax

Question 58

uses progressive tax on individual tax and flat rate on corporation (30%)

Answer 58

Progressive or proportional tax

Question 59

means the pertinent items of gross income specified in the Tax code, less the deductions, if any, authorized for such types of income, by the tax code or other special laws

Answer 59

Taxable income