HEADS UP Flashcards
Is the inherent power of the state by which the sovereign raises revenue to defray the necessary expenses of the government
TAXATION
Subject and Objects that is taxable (PPP)
PERSON, PROPERTY, PRIVELAGES
Aspect of taxation
LEVYING, ASSESSMENT, COLLECTION
Legislative, Lawn making body, Sanggunian
LEVYING
Determining the amount, Executive
ASSESSMENT
BIR Customs, Treasury of Baranggay
COLLECTION
Primary purpose of taxation
To raise revenue/ Fiscal Property
Secondary Purpose of Taxation
- Promotion of General Welfare
- Reduction of Social Inequity
- Economic Growth
Social and Economic Objectives of Taxation
a. Shifting of Wealth from rich to poor
b. Maintaining Price Stabilization
c. Stimulating Economic growth
d. Encouraging full employment
Life Blood Doctrine
The government will not exist without taxation
Holds that individual should be taxes in proportion to the benefit they received from the (payment) government programs and projects at taxes paid
BENEFIT RECEIVED THEORY
Holds that people taxes should be based upon, Usually as measured by income or wealth
Ability-To-Pay Principle
The power to tax involves the power to destroy
MARSHALL DOCTRINE
Taxation power is not power to destroy while the court sits
Holmes Doctrine
It means taxing the same person for the same tax period and same activity twice by the same jurisdiction
DOUBLE TAXATION
Modes of Eliminating Double Taxation (TTT)
Tax Deduction
Tax Credit
Treaty with other state
The tax is transferred to another without violating the law
SHIFTING
The reduction in the prize of the taxed object equal to the capitalized value of future taxes of the purchaser is expected to be called upon to pay
CAPITALIZATION
Exploitation by the taxpayer of legally permissible alternative tax rates or methods of assessing Taxable or income “Tax Minimization
TAX AVOIDANCE
An illegal practice where a person or entity intentionally does not pay due taxes
TAX EVASION
Inherent Powers of the State
TAXATION, POLICE POWER, EMMINENT DOMAIN
Is the power of the state to regulate the liberty and property for the promotion of general welfare
POLICE POWER
is the power of the state to forcible acquire private property upon payment of just compensation, for some intended public use
EMMINENT DOMAIN
Essential Characteristics of Tax
- It is an enforced contributions
- It is levied by the law making body
- It is proportionate in character
- It is generally payable in money
- It is imposed for the purpose of raising revenue
- It is used for public purpose
Place of Taxation
Situs of Taxation
Factors in determination of situs of taxation
- Subject Matter
- Nature of Tax
- Citizenship of Taxpayer
- Residence of Taxpayer
Person
Residence of Taxpayer
Real property or Tangible Personal Property
Domicile of the owner unless he/she acquired a situs elsewhere
Income
Taxpayer’s residence or citizenship or place where the income was earned
Business occupation and transaction
Place where business is operated, Occupation being practiced and transaction completed
Transfer of Property
Taxpayer’s residence or citizenship or location of the property
Basic Principles of Sound Tax System
- Fiscal Adequacy
- Administrative Feasibility
- Theoretical Justice or Equity
Sources of revenue are sufficient to meet government expenditures
FISCAL ADEQUACY
The law must be capable of convenient , Just and Effective Administration
ADMINISTRATIVE FEASIBILITY
The tax imposed must be proportionate to taxpayer’s ability to pay
THEORETICAL JUSTICE
For general purpose
Fiscal Purpose/ Raise Revenue
To regulate business, Conduct, Acts or Transaction
Regulatory Purpose