Chapter 2 Flashcards
This is any law that arises from the exercise of the taxation power of the State.
Taxation law
What are the two types of taxation laws?
Tax laws
Tax exemption law
These are laws that provide for the assessment and collection of taxes.
Tax laws
These are laws that grant certain immunity from taxation.
Tax exemption laws
What is the nature of tax laws? Penal or civil?
Civil
In what domain of law do tax laws fall under?
Public law
This is the supreme law of the land.
Constitution
Does the constitution impose any tax liability?
No
If the constitution does not impose any tax liability, what does it provide?
The grant of taxation power and the limitations in the exercise of the same.
These provides restrictions to the power of the President, limits taxation power of LGUs and specifically imposes taxes.
Statutes
Under what clause of statutes limits the taxation power of the President?
Flexible Tariff Clause
This source of taxation law is in the form of Revenue Regulations and Department Orders.
Issuance by the Secretary of Finance
This source of taxation law is issues by the Commissioner of Internal Revenue. It is in the form of RMOs, RMCs, RAOs, etc.
Administrative Issuances
This source of taxation law empowers the LGU to impose taxes. It is local in nature.
Tax Ordinances
This source of taxation law is a bilateral agreement between two sates and it is to reconcile the national fiscal legislations of the contracting parties in order to help avoid simultaneous tax liabilities in two different jurisdictions.
Tax Treaties
These are issuances signed by the Secretary of Finance upon recommendation of the Commissioner of Internal Revenue that specify, prescribe, or define rules and regulations for the effective enforcement of the provisions of the National Internal Revenue Code and related statutes.
Revenue Regulations
These are formal pronouncements intended to clarify or explain the tax law and carry into effect its general provisions.
Revenue Regulations
These are issuances that provide directives or instructions; prescribe guidelines, and outline processes, operations, activities, and methods necessary in the implementation of stated policies and programs of the Bureau in all areas of operations except auditing.
Revenue Memorandum Orders
These are rulings, opinions, and interpretations of the CIR with respect to the provisions of the Tax Code and other tax laws as applied to a specific set of facts, with or without established precedents.
Revenue Memorandum Rulings
What is the area of operations that is not under RMOs?
Auditing
Can BIR Rulings contravene duly issued RMRs?
No, these Ruling are then null and void ab initio.
These are issuances that publish pertinent and applicable portions as well as amplifications of laws, rules, regulations, and precedents issued by the BIR and other agencies/offices.
Revenue Memorandum Circulars (RMCs)
These refer to periodic issuances, notices, and official announcements of the Commissioner of Internal Revenue that consolidate the Bureau of Internal Revenue’s position on certain specific issues of law or administration in relation to the provisions of the Tax Code.
Revenue Bulletins
These are official positions of the Bureau to queries raised by taxpayers and other stakeholders relative to clarification and interpretation of tax laws.
BIR Rulings
These 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.
Rulings
Are GAAP laws?
NO these are mere conventions of financial reporting
Are Philippine tax laws political in nature?
No
Can tax be paid in non-monetary terms?
Yes, in limited circumstances
This is a tax imposed for general purpose.
Fiscal or revenue tax
This is a tax imposed to regulate business, conduct, and transactions.
Regulatory Tax
This is a tax levied to achieve some social or economic objectives
Sumptuary tax
This is a tax on persons who are residents of a particular territory
Personal, poll, or capitation tax
This is a tax on real or personal properties
Property taxes
This is a tax imposed upon the performance of and enjoyment of a privilege or engagement in an occupation.
Excise or privilege tax
This is the kind of tax where both the impact and incidence of taxation rest upon the same taxpayer. Here, the tax is collected from the person who is intended to pay the same. The statutory taxpayer is the economic taxpayer in this case.
Direct tax
This is the kind of tax where it is paid by any person other than the one who is intended to pay the same. Here, the statutory taxpayer is not the economic taxpayer.
Indirect Tax
This is the person named by law to pay the tax
Statutory taxpayer
This is the one who actually pays the tax
Economic taxpayer
This is a tax of a fixed amount imposed on a per unit basis such as per kilo, liter, or meter.
Specific tax
This is a tax of a fixed proportion imposed upon the value of the tax object
Ad valorem
This is a flat or fixed tax rate. This kind of tax emphasizes equality by taxing the same rate without the regard to taxpayers’ ability to pay.
Proportional tax
This is a tax which imposes increasing rates as the tax base increase.
Progressive tax or graduated tax
This tax imposes decreasing tax rates as the tax base increase. It directly violates the Consistutional guarantee of progressive taxation.
Regressive tax
This tax manifest tax rates which is a combination of any of the above types of tax.
Mixed tax
This is a tax imposed by the national government.
National tax
This is tax on annual income, gains, or profits.
Income tax
This tax on gratuitous transfer of properties by a decedent upon death.
Estate tax
This tax on gratuitous transfer of properties by a living donor.
Donor’s tax
This is consumption tax collected by VAT business taxpayers.
Value Added Tax
This is consumption tax collected by non-VAT business taxpayers.
Other percentage tax
This is tax on sin products and non-essential commodities such as alcohol, cigarettes and metallic minerals.
Excise tax
This is a tax on documents, instruments, loan agreements, and papers evidencing the acceptance, assignment, sale or transfer of an obligation, right or property incident thereto.
Documentary stamp tax
This is tax imposed by the municipal or local government.
Local tax
What are examples of local tax?
Professional taxes
Real property taxes
Business taxes, fees, and charges
This refers to the initial burden of the tax. It occurs at the point of imposition and falls upon the person from whom the tax is collected under the law. It cannot be shifted.
Impact of tax (Liability)
This refers to the ultimate burden of the tax. It occurs at the point of settlement and rests on the person who pays it eventually. It can be shifted.
Incidence of tax (Burden)
This emanates from police power and is imposed to regulate the exercise of a privilege such as the commencement of a business or a profession. It is a pre-activity imposition as opposed to tax which is a post-activity imposition.
License fee
This is a charge for the use of other’s property.
Toll
This is levied by the government on lands adjacent to a public improvement.
Special Assessment
This is the amount imposed on imported or exported commodities.
Tariff
This is an amount imposed to discourage an act.
Penalty
This refers to the methods or schemes of imposing, assessing, and collecting taxes. It includes all the tax laws and regulations.
Tax system,
This tax system emphasizes direct taxes which cannot be shifted. It encourages economic efficiency as it leaves no other resort to taxpayers than to be efficient.
Progressive System
This tax system is one that emphasizes indirect taxes. Here, the impact of taxation rests upon the bottom end of the society.
Regressive system
In this collection system, the payor of the income withholds or deducts the tax on the income before releasing the same to the payee and remits the same to the government.
Withholding system on income tax
Here, an estimated tax required by the government to be withheld by employers against the compensation income to their employees.
Withholding tax on compensation
Here, an estimated tax required by the government to be deducted on certain income payments made by taxpayers engaged in business.
Expanded withholding tax
This is a system of tax collection wherein payers are required to deduct the full tax on certain income payments. This is intended for the collection of taxes from income with high risk of non-compliance.
Final withholding tax
In this system, the taxpayer himself determines his income, reports the same through income tax returns and pays the tax to the government
Self-assessment method or voluntary compliance system
In this system, the government identifies non-compliant taxpayers, assesses their tax dues and demands for taxpayers’ voluntary compliance or enforces collections by coercive means.
Assessment or enforcement system
According to him, the governments should adhere to the principles of a sound tax system.
Adam Smith
What are the principles of a sound tax system?
Fiscal adequacy
Theoretical justice
Administrative feasibility
This requires that sources of government funds must be sufficient to cover government costs.
Fiscal adequacy
This suggests that taxation should consider the taxpayer’s ability to pay. It suggest that the exercise of taxation should not be oppressive, unjust, or confiscatory.
Theoretical justice
This suggests that tax laws should be capable of efficient and effective administration to encourage compliance.
Adminsitrative feasibility
Does the non-compliance of tax systems to the principles of a sound tax system make the system or the laws under it null and void?
No. These are only guides not requisites
This refers tot he management of the tax system.
Tax administration
To which is the tax administration of the national tax system in the Philippines entrusted to?
The Bureau of Internal Revenue under the supervision and administration of the Department of Finance
