Module 2 Flashcards
is the inherent power of the sovereign, exercised through the legislature, to impose burdens upon subjects and objects within its jurisdiction for the purpose of raising revenues to carry out the legitimate objects of government.
Taxation
are the enforced proportional contributions from persons and property levied by the law-making body of the State by virtue of its sovereignty for the support of the government and all public needs, [Cooley]
Taxes
Three types of taxes
National, Local and Special Taxes
are fees that the BIR collects from taxpayers all over the Philippines. Imposed on different incomes and transactions in the Philippines, as defined by the BIR (e.g Income tax)
National taxes
are involuntary fees that local government units (LGUS) collect from their constituents to finance activities and projects for their city or municipality. (eg Real property tax)
Local taxes
are taxes that must be paid during certain cransactions or purchases (e.g. Motor vehicle user charge)
Special Taxes
The determination of _________ for which taxes shall be levied provided it is for the benefit the public.
purposes
The determination of _________
taxation such as the person, property, or occupation within jurisdiction.
subjects
The determination as to the __________________ of tax unless constitutionally prohibited.
amount or rates
The determination as to the _____ of tax to collect (i.e., property tax, income tax, inheritance tax, etc.).
Kind
The determination of __________________ the taxes
agencies to collect
The power to specify or provide ____________ and _____________.
administrative
judicial remedies
The power to _________________ and condonations.
grant tax exemptions
Requirement that levy must be for a public purpose.
Inherent Limitations
Non-delegation of the legislative power to tax.
Inherent Limitations
Exemption from taxation of government entities
Inherent limitations
International comity
Inherent Limitations
Territorial jurisdiction
Inherent Limitations
The 2 Limitations on the power or tax
Inherent Limitations and Constitutional Limitations
Due Process
Constitutional Limitations
Equal protection of the Laws
Constitutional Limitations
Uniformity & Progressivity
Constitutional Limitations
Non-imprisonment for non-payment of poll tax
Constitutional Limitations
Exemption from Property Tax of Religious, Charitable, and Educational Institutions
Constitutional Limitations
Exemption of Non Stock Non profit educational Institutions
Constitutional Limitations
Veto Power of the President
Constitutional Limitations
Revenue and Tariff Bill must exclusively originate from the lower house
Constitutional Limitations
Grant of Exemption Requires the Majority votes of congress
Constitutional Limitations
Local Government’s power to tax
Constitutional limitations
No Appropriation for Religious Purposes
Constitutional Limitations
Non-impairment of Contracts
Constitutional Limitations
Religious Freedom
Constitutional limitations
The 3 Principles of Sound Tax System (FAT)
Fiscal Adequacy
Administrative Feasibility
Theoretical Justice
revenue raised must be sufficient to meet government/public expenditures and other public needs.
Fiscal Adequacy
tax laws must be clear and concise; capable of effective and efficient enforcement; convenient as to time and manner of payment, and must not obstruct business growth and economic development.
Administrative Feasibility
must take into consideration the taxpayer’s ability to pay (Ability to Pay Theory). Art. VI, Sec. 28(1) of the 1987 Constitution mandates that the rule on taxati must be uniform and equitable and that the State evolve a progressive system of taxation.
Theoretical Justice
it is taxing the same person for the same tax period and the same activity twice, by the same jurisdiction.
Double Taxation
in broad sense is the opposite of direct double taxation and is not legally objectionable.
Double Taxation
The absence of one or more of the foregoing requisites of obnoxious direct tax makes it indirect.
Double Taxation
exploitation by the taxpayer of legally permissible alternative tax rates or methods of assessing taxable property or income, in order to avoid or reduce tax liability. Also known as “tax minimization.” (e.g., utilizing all permissible allowable deductions)
Tax Avoidance
use of a taxpayer of illegal or fraudulent means to defeat or lessen the payment of tax.
Tax Evasion
Also known as “tax dodging.” it presupposes malice, fraud, bad faith, or willful intent on the part of the taxpayer either to under-declare income or over-declare deductions to defeat tax liability,
Tax Evasion
