Classifications & Distinctions

Question 1

Different classifications

Answer 1

1. Based on Objects
2. As to who bares the burden/incidence
3. As to determination of amount
4. Purpose
5. Authority/Scope
6. Graduation/Rate

Question 2

(Object) Personal Taxes

Answer 2

tax of a fixed amount imposed on persons residing within a specified territory, whether citizens or not, without regard to their property or the occupation or business in which they may be engaged

the person themselves

Question 3

Community Tax or Poll Tax

Answer 3

according to the 1987 constitution, you can not be imprisoned for nonpayment of community tax (the only exception)

Question 4

(Object) Property Taxes

Answer 4

Tax imposed on property, whether real or personal, in proportion either to its value, or in accordance with some other reasonable methods of apportionment.

Question 5

Real Property

Answer 5

Fixed [Land, buildings, machineries fixed to the ground], immovable

Question 6

Personal Property

Answer 6

Movable

Question 7

(Object) Excise/Privilege Taxes

Answer 7

the obligation to pay this tax is based on the voluntary action of the person taxed in performing the act or engaging in the activity which is subject to the excise

on the privilege to conduct certain activities. having the privilege to have an occupation or having property/assets to donate or pass on

Question 8

Excise tax

Answer 8

is a charge imposed upon the performance of an act, the enjoyment of a privilege, or the engaging in an occupation

Question 9

Example of Excise Tax

Answer 9

1. Estate tax: A tax imposed on the total value of property and assets transferred from a deceased person to their heirs. It applies to the amount exceeding a certain threshold set by the government. Also known as inheritance tax or death duty.
2. Donor’s tax: A tax paid by the donor of a gift given to an individual while the donor is still alive. It is imposed in some countries/jurisdictions instead of or in addition to gift and estate taxes. The rates vary but are generally lower than estate taxes.

Question 10

(Incidence) Direct

Answer 10

Tax which is demanded or exacted from the very person who also shoulders the burden of the tax; or tax for which the taxpayer is directly or primarily liable or which he cannot shift to another

Statutory liability and economic burden falls onto the same person

Question 11

Example of Direct tax

Answer 11

Corporate and individual income taxes; community tax; estate tax; donor’s tax

Question 12

(Incidence) Indirect

Answer 12

tax imposed upon goods before they reach the consumer who ultimately pays for it not as tax but as part of the purchase price of goods sold or services rendered.

Question 13

Practically all business taxes are _______

Answer 13

indirect taxes

Question 14

(Determination of amount) Specific

Answer 14

Fixed Amount. An absolute value at peso amount

Question 15

Example of (Determination of amount) Specific

Answer 15

1. Cigarette tax - $1 per pack of cigarettes
2. Liquor tax - $5 per bottle of whiskey

Question 16

(Determination of amount) Ad Valorem

Answer 16

Percentage of the value of the property

Question 17

Example of (Determination of amount) Ad Valorem

Answer 17

1. Property tax - 1.5% of assessed property value
2. Sales tax - 8% of purchase price of an item

Question 18

(Purpose) General

Answer 18

To generate revenue

Question 19

Example of (Purpose) General

Answer 19

TRAIN Law (2015) - imposed additional excise taxes on petroleum products to finance the BUILD, BUILD, BUILD program

Question 20

(Purpose) Special

Answer 20

If the purpose of enacting the tax bill is to regulate certain activities, promote general welfare, social justice, encourage economic growth, and generating revenue is only incidental

Question 21

Example of (Purpose) Special

Answer 21

Sin Tax Law; minimum wage law

Question 22

(Authority/Scope) National

Answer 22

taxes are being paid to the BIR

Question 23

(Authority/Scope) Local/Municipal

Answer 23

Local governemnt, power is delegated by the constitution

Question 24

(Graduation/rate) Proportional or Fixed

Answer 24

Also called a flat tax, the tax rate remains the same regardless of income/earning level. It is a fixed percentage.

Question 25

Example of (Graduation/rate) Proportional or Fixed

Answer 25

1. CGT, VAT, Real Estate Tax, Donor’s Tax

Question 26

(Graduation/rate) Progressive

Answer 26

the tax base increases, the tax rate increases

Question 27

(Graduation/rate) Regressive

Answer 27

tax rate of which decreases as the tax base or bracket increases

Question 28

Tax distinguished from penalty

Answer 28

a penalty is a punishment for violating laws or rules, while a tax is a charge imposed by the government to raise revenue.

Question 29

Tax distinguished from license or permit fee

Answer 29

a license or permit fee is a charge imposed for regulatory purposes

involves the exercise of police power, is limited to the cost of regulation, and makes the licensed activity legal, while a tax is an enforced contribution for public expenses, has no limit on the amount, and does not necessarily make the taxed activity illegal.

Question 30

Tax distinguished from toll

Answer 30

a toll is a fee charged for the use of a specific public facility like a road or bridge, while a tax is a broader charge imposed by the government to raise general revenue. The Supreme Court has ruled that tolls are subject to taxation, such as VAT, because they are considered distinct from a general tax.

Question 31

Tax distinguished from special assessment

Answer 31

A special assessment is based on the benefit to the land, not necessity, and the liability is limited to the land involved, not a personal liability.

the power to tax includes the power to levy a special assessment, but an exemption from taxation does not necessarily exempt from a special assessment.

Question 32

Tax distinguished from debt

Answer 32

a tax is mandated by law, while a debt arises from a voluntary agreement, and a tax is not assignable and has different rules regarding payment, prescription, and interest compared to a debt.