Exercise 1 Flashcards
What are the administrative issuances that may be relied upo. In interpreting the provisions of the Tax Code?
Revenue Regulations, Revenue Memorandum Orders, Revenue Memorandum Rulings, Revenue Memorandum Circulard, Revenue Memorandum Rulings, and BIR Rulings
Supreme Court decisions are treated with regard to Philippine law i. A manner that?
They are recognized as binding interpretatiobs of Philippine law, particukarly in cases involving the legality of any tax, impost, assessment, o toll or any penalty imposed in relation thereto.
What are the aspects of taxation?
1) levying - act of the legislature in choosing the person, propeties, rights or privileges to be subjected to taxation
2) Assessment and collection - the act of the executing the law through the administrative agencies of government;
3) Payin - Act of the taxpayer in settling his tax obligations
What is tge authority of th Congress with regards to the power to tax of local government units?
Congress can provide guidelines and limitations on the exercise of the power to tax by local government units.
What are Revenue Orders (RMOs)
Issuances that provide directives or instructions; prescribe guidelines; and outline process, operations, activities, workflws, methods and procedures necessary in the implementation of stated policies, goals, objectives plans and programs of the Bureau in all areas of operations, excepts auditing.
Who promulgate the rules and regulations for the effective enforcement of the provisions of the Tax Code?
The Secretary of the Department of Finance
What are the entities/institutions that are expressly granted tax exemption b the Philippine Constitution?
Charitable institutions, churches, parsonage of convent appurtenant thereto, mosques, and nonprofit cemeteries and all lands buildings and improvements actually, directly and exclusively used for religious, charitable or educational purposes.
What power does the President have with respect to appropriation, Revenue or tariff bills?
The power to veto any particular item or items n a bill
What statement expresses the lifeblood theory?
The underlying basis of taxation is government necessity, for without taxation, a government can neither exist nor endure.
Real property taxes should not disregard increases in the value of real property occurring ove a long period of time. To do otherwise would violate the canon of a sound ta system referred to as:
Fiscal Adequacy
What is thee direct constitutional limitation on the power of taxation related to religious, charitable, and educational entities?
Exemption from property taxation
What is the basis for the power to tax?
The need for the government to generate income to fund it’s operations.
What taxes are considered indirect taxes?
Value-added tax, excise tax, and other percentage taxes.
Under what circumstances can the Court of Tax Appeals enjoin the collection of taxes through administrative remedies?
When collection could jeopardize the interest of the government or taxpayers
What is the limit on tax exemptions in the Philippines?
Tax exemptions are limited to those granted by law
What can the congress authorize the President to fix twiti specified limits, subject to certain limitations and restrictions?
Tariff rates, import and export quotas, tonnage an wharf age dues, and other duties or impost.
Why is it important not to construed the word “item” in a revenue bill as referring to the wholw section?
It would limit the President’s power o veto specific provision in a revenue bill
What types of facilities are covered by the Tax exemption for properties used for religious, charitable, and educational purpose?
Facilities that are incidental to or reasonably necessary for the accomplishment of religious, charitable, and educational purposes
What is the basis of taxation?
The reciprocal duty to protect ang support
What is meant by the term “impact of taxation” according to the nature of taxation?
The poine in which the Tax is levied.
What are the other purposes of taxation?
1) Environmental Purpose - for environmental sustainability
2) Fiscal Purpose - raise revenue
3) Social Purpose - promote social welfare or encourage certain tyoes of behavior
4) Economic Purpose - to influence economic activity
Excise tax
Charge upon the performance of an act, privilege, or an engaging in an occupation.
Revenue Regulation
Intended to clarify or explain the Tax Law and carry into effect its general provisions by providing details of administration and procedure. Habe the force and effect of law
Administrative Issuances
Less general interpretations of the tax laws to clarify certain provisions of the tax law
Assignment of internal revenue officers
> Establishments where articles subject to excise tax are produced and kept - no longer than 2 years
Assessment and collection function - no longer than 3 years
Special Duties - no longer than 1 year
Principles of Sound Taxation
1) Fiscal Adequacy - sufficient funds
2) Adminstrative Feasibilit - convenient
3) Theoretical Justice - coniders the taxpayer’s ability to pay and benefits receive theory
Taxation and Economic Efficiency
1) Income Effect - economically efficient (transformation)
2) Substitution Effect - economically inefficient (Indirect taxes)
What is the Marshall Dictum Doctrine
“The Power to Tax includes the Power to Destroy” - valid as an implement of Police Power, Not valid if in raising revenue
What is Holmes Doctrine
“Taxation Power is The Power to Build- should not be the power to destroy
What is the Principle of “Stricttissimi Juris”
Taxation is the rule and exemption is the exemption” - Tax exemption shall be strictly construed against the taxpayer
A tax system which is dominantly characterized by indirect taxes is referred to as a__________?
Regressive tax system
The CIR may terminate the accounting period of the taxpayer when?
1) The taxpayer is intending to leave the Philippines.
2) The taxpayer is removing his properties in the usual place of business.
3) The taxpayer is intending to do an act that will obstruct collection of taxes.
An order imposed by the CIR upon persons to produce certain documents.
Subpoena duces tecum
What is the minimum compromise offer and the proper approving body?
10% of the Tax Due
<=500K - REB
> 500K - 1M - CIR
>1M - NEB
- If the taxpayer request falls below the minimum compromise rates, the CIR will approve.
What are the bases for compromise?
1) A reasonable doubt as to the validity of the claim against the taxpayer exists.
2) The financial position of the taxpayer demonstrates a clear inability to pay the assessed tax
What are the bases for abatement or cancellation of tax liability?
1) The tax or any portion thereof appears to be unjustly or excessively assessed.
2) The administration and collection costs involved do not justify the collection of the amount due.
What are the criminal violations that cannot be compromised?
1) Those already filed in court.
2) Those involving fraud
3) Those involving non-remittance of withholding tax
Upon taxation depends the government’s ability to serve the people for whose benefit taxes are collected, hence, taxes may be imposed even in the absence of constitutional grants and collection of taxes cannot be stopped.
Necessity theory
Can BIR issue an assessment for unpaid taxes due to non-filling of returns?
Yes, non-filling of tax returns almost equates to fraud. Taxes will not prescribe under such conditions. It will prescribe only when the non-filling/non-payment is discovered. The 10-year prescription period starts for discovery.
Can BIR issue an assessment for tax deficiency?
A deficient payment means there was prior compliance but was only partial. There is no bad faith (fraud), the deficiency must be discovered within 3 years from the deadline of filling or payment of the tax, whichever is late.
What is specific tax
A specific tax is a tax on a fixed amount imposed by the head or number. The tax is levied on each unit of product regardless of its value. Example : tax on distilled spirits
What is “Ad Valorem tax”?
It is a tax that is imposed for a fixed proportion of the amt or value of the property to which the tax is assessed. Ex: Excise tax on gasoline
Which of the following is true of a proportional or flat rate tax system?
The tax is based on a fixed percentage of the amt. of the property, income or other bases to be taxed
