Chapter 1&2 Flashcards
- Inherent powers of the state and its nature.
Police Power – the power to protect citizens and provide for safety and welfare
Eminent Domain Power – the power to take private property for public use
Taxation Power – the power to enforce contributions to support the government
- Examples of inherent powers
Police power, Eminent Domain power, Taxation Power
- Some limitations provided by the constitution in the power to tax
a. Due process of law
b. Equal protection of law
c. Rule of uniformity and equity
d. Non-impairment of contacts
e. President’s power to veto separate items in revenue or tariff bills
f. Exemption from property taxation of religious, charitable or educational entities
g. No public money shall be appropriated for religious purposes
h. Majority of all members of the congress required in granting tax exemption
i. No imprisonment for nonpayment of poll tax
- Inherent limitations on the power to tax
a. Taxes may be levied only for Public purposes
b. Government entities are generally Exempt
c. Being inherently legislative, taxation may Not be delegated
d. Tax power is limited to Territorial jurisdiction of the State
e. Taxation is subject to International comity
- Substantive vs. procedural
Substantive – the law should be reasonable and not oppressive
Procedural – requires opportunity to be heard in proper court of litigation before judgment is rendered affecting one’s person or property
- Theories of taxation
a. PROSPECTIVITY OF TAX LAWS
b. IMPRESCRIPTIBILITY OF TAXES
c. DOUBLE TAXATION
d. ESCAPE FROM TAXATION
e. EXEMPTION FROM TAXATION
f. EQUITABLE RECOUPMENT
g. SET-OFF TAXES
h. TAXPAYER SUIT
i. COMPROMISES
j. POWER TO DESTROY
- Purposes of taxation
a. REVENUE PURPOSES
b. REGULATORY PURPOSE
c. COMPENSATORY PURPOSE
- Regressive vs Progressive system of taxation
Regressive - Regressive taxation is used in reference to fixed taxes, where every individual is taxed an equal amount of money, irrespective of his level of income. For example, federal and state taxation of cigarettes is considered as regressive
Progressive - the rate of the tax increases as the tax base or bracket increases
- Types of veto power
A. ITEM VETO - THE POWER TO VETO ITEMS IN APPROPRIATION BILLS WITHOUT AFFECTING ANY OTHER PROVISIONS OF SUCH BILLS, AND
B. POCKET VETO - THE POWER TO DISAPPROVE LEGISLATIVE ACT BY THE PRESIDENT WITH THE RESULT THAT BILLS SHALL FAIL TO BECOME LAWS.
- To be granted tax exemption, how many members of the congress do you need?
NO LAW GRANTING ANY TAX EXEMPTION SHALL BE PASSED WITHOUT THE CONCURENCE OF A MAJORITY OF ALL THE MEMBERS OF THE CONGRESS. (142)
- What are the objectives of taxation
a. REVENUE PURPOSES
b. REGULATORY PURPOSE
c. COMPENSATORY PURPOSE
- What are the scope of taxation
a. IT REACHES EVERY TRADE OR OCCUPATION
b. EVERY OBJECT OF INDUSTRY, AND
c. EVERY SPECIES OF POSSESSION.
- Tax avoidance vs evasion
a. “TAX AVOIDANCE” - THIS IS THE REDUCING OR TOTALLY ESCAPING PAYMENT OF TAXES THROUGH LEGALLY PERMISSIBLE MEANS.
b. “TAX EVASION” - UNDER THIS METHOD, THE TAX PAYER USES UNLAWFUL MEANS TO EVADE OR LESSEN THE PAYMENT OF TAX. THIS FORM OF TAX DODGING IS PROHIBITED AND THEREFORE SUBJECT TO CIVIL AND/ OR CRIMINAL PENALTIES.
- Are tax exemptions construed and interpreted in favor of the government or taxpayer?
In case of doubt, it should be in favor of the government and against the taxpayer.
- Are tax impositions construed and interpreted in favor of the government or taxpayer?
In case of doubt, it should be in favor of the taxpayer and against the government.
- Effectivity of RA 8424
This Act shall take effect on January 1, 1998.
- Tax bills emanate from where?
a. CONSTITUTION OF THE PHILIPPINES;
b. STATUTES
c. EXECUTIVE ORDERS;
d. TAX TREATIES AND CONVENTION WITH FOREIGN COUNTRIES;
e. REVENUE REGULATIONS BY THE DEPARTMENT OF FINANCE;
f. BIR REVENUE MEMORANDUM CIRCULARS & BUREAU OF CUSTOMS MEMORANDUM ORDERS;
g. BIR RULINGS;
h. JUDICIAL DECISIONS;
- What department supervises the BIR?
Department of Finance
- Current CIR
Kim Hinares
- Who has exclusive appellate jurisdiction on tax cases
Court Tax Appeals
- Examples of local tax
TAX ON OCCUPATIONS, FLOOD TAX
- Subpoena testificandum vs subpoena duces tecum
ubpoena testificandum – subpoena to testify
b. Subpoena duces tecum – subpoena to show supporting documents
- What are revenue regulations
THESE ARE RULES OR ORDERS HAVING FORCE OF LAW ISSUED BY EXECUTIVE AUTHORITYOF THE GOVERNEMENT TO ENSURE UNIFORM APPLICATION OF TAX LAWS.
- Example of indirect tax
EXAMPLES: BUSINESS TAXES, CUSTOMS DUTIES
