Ch.2 Taxes, Tax Laws and Tax Administration Flashcards
Explain to me what is taxation law
refers to any law that arises from the exercise of the taxation power of the State
Enumerate the types of taxation laws
- Tax Laws
- Tax Exemption Laws
What are the sources of taxation laws
- Constitution
- Statutes and Presidential Decrees
- Juridical Decisions or case laws
- Executive Orders and Batas Pambansa
- Administrative Issuances
- Local Ordinances
- Tax Treaties and Conventions with foreign countries
- Revenue Regulations
What are the types of Administrative Issuances
- Revenue Regulations
- Revenue memorandum orders
- Revenue memorandum rulings
- Revenue memorandum circulars
- Revenue bulletins
- BIR Rulings
What are rulings?
are merely advisory or a sort of information service to the taxpayer such that none of them is binding except to the addressee and may be reversed by the BIR at anytime
Explain the difference between GAAP and Tax Laws
GAAP are not laws, but are mere conventions of financial reporting. Taxpayers normally follow GAAP in recording transactions in their books. However, in the preparation and filing of tax returns, taxpayers are mandated to follow the tax law cases of conflict with GAAP
What is the nature of Philippine tax laws?
Philippine tax laws are civil and not political in nature. They are effective even during periods of enemy occupation. Our internal revenue laws are not penal in nature because they do not define crime. Their penalty provisions are merely intended to secure taxpayers’ compliance
Enumerate the types of rulings
- Value Added Tax (VAT) Rulings
- International Tax Affairs Division (ITAD) Rulings
- BIR Rulings
- Delegated Authority (DA) Rulings
What is tax?
is an enforced proportional contribution levied by the lawmaking body of the state to raise revenue for public purpose
What are the elements of a valid tax
- Tax must be levied by the taxing power having jurisdiction over the object of taxation
- Tax must not violate Constitutional and inherent limitations
- Tax must be uniform and equitable
- Tax must be for public purpose
- Tax must be proportional in character
- Tax is generally payable in money
Enumerate the classification of taxes
- As to purpose
- As to subject matter
- As to incidence
- As to amount
- As to Rate
- As to imposing authority
Give examples of taxes as to purpose
- Fiscal or revenue tax
- Regulatory tax
- Sumptuary
Give examples of taxes as to subject matter
- Personal, poll or capitation
- Property Tax
- Excise Tax or Privilege Tax
Give examples of taxes as to incidence
- Direct Tax
- Indirect Tax
Give Examples of taxes as to amount
- Specific Tax
- Ad Valorem
Give examples of tax as to rate
- Proportional Tax
- Progressive or Graduated Tax
- Regressive Tax
- Mixed Tax
Give Examples of tax as to imposing authority
- National Tax
- Local Tax
Differentiate Tax and Revenue
Tax refers to the amount imposed by the government for public purpose. Revenue refers to all income collections of the government which includes taxes, tariffs, licenses, toll, penalties, and others. The amount imposed is tax but the amount collected is revenue
Differentiate Tax and License Fee
Tax emanates from taxation power, License Fee emanates from police power. Tax are imposed after the commencement of a business or profession where license fee is imposed before engagement in those activities. In other words, tax is a post-activity imposition whereas license is a pre-activity imposition
Differentiate Tax and Toll
Tax is a levy of government; hence, it is a demand of sovereignty. Toll is a charge for the use of other’s property; hence, it is a demand ownership. The amount of tax depends on the needs of the government, toll is dependent upon the value of the property leased. Both private entities and the government impose toll but private entities cannot impose taxes
Differentiate Tax vs Debt
Tax arises from law; Debt arises from private contracts. Non-payment of tax leads to imprisonment; Non-payment of debt does not lead to imprisonment. Debt can be subject to set-off but tax is not. Debt can be paid in kind but tax is generally payable in money. Tax only draws interest when taxpayer is delinquent, while Debt draws interest when it is so stipulated by the contracting parties or when debtor incurs a legal delay.
Differentiate Tax vs Special Assessment
Tax is imposed upon persons, properties, or privileges. Special assessment is levied by the government on LANDS adjacent to a public improvements. It is imposed on LAND ONLY and is intended to compensate the government for a part of the cost of the improvement. Unlike taxes, special assessment attaches to the land. It will not become a personal obligation of the land owner. Therefore, the non-payment of special assessment will not result to imprisonment of the owner
Differentiate Tax and Tariff
Tax is an amount imposed upon persons, privilege, transactions, or properties. Tariff is the amount imposed on imported or exported commodities
Differentiate Tax and Penalty
Tax is an amount imposed for the support of the government. Penalty is an amount imposed to discourage an act. Penalty may be imposed by the government and private individuals. It may both arise from law or contracts whereas tax arises from law
Explain to me what a tax system is
refers to the methods or schemes of imposing, assessing, and collecting taxes. It includes all the tax laws and regulations, the means of their enforcement, and the government offices, bureaus and withholding agents which are part of the machineries of the government in tax collection. The Philippine tax system is divided into two: The national tax system and the local tax system
Enumerate the types of tax systems according to imposition
- Progressive
- Proportional
- Regressive