Taxation Part 2

Question 1

What are the 6 classifications of Taxes?

Answer 1

1. As to Subject Matter
2. As to Amount
3. As to Rate
4. As to Incidence
5. As to Imposing Authority
6. As to Purpose

Question 2

What are the 4 types of taxes As to Subject Matter?

Answer 2

1. Poll or Capitation
2. Personal
3. Privilege or Excise
4. Property

Question 3

What are the 2 types of taxes As to Amount?

Answer 3

1. Specific - Based on a unit of measurement
2. Ad Valorem - Based on value of property

Question 3

What are the 3 types of taxes As to Rate?

Answer 3

1.Proportional
2. Regressive
3. Progressive

Question 4

What are the 2 types of taxes As to Incidence?

Answer 4

1. Direct - You cannot shift this tax burden
2. Indirect - You can the tax burden around

Question 5

What are the 2 types of taxes As to Imposing Authority

Answer 5

1.National Tax
2. Local Tax

Question 6

What are the 3 types of taxes As to Purpose

Answer 6

1. Fiscal or Revenue
2. Regulatory
3. Sumptuary or Compensatory

Question 7

Differentiate Tax and Debt

Answer 7

Both are obligations but
Tax comes from Law (Can go to Jail)
Debt comes from Contracts (Can not go to Jail)
You can set off debts but not Tax
You can pay off debts with property but tax is money almost exclusively

Question 7

What is Dacion en Pago

Answer 7

In dacion en pago, property is alienated to the creditor in satisfaction of a debt in money.
Basically you pay off your debt with property instead of money
In practice this is when the creditor takes your car if you can’t pay your debt

Question 7

Differentiate Tax and Toll

Answer 7

Tax is a levy of government, is a demand of sovereignty
Toll is a charge for use of other property, is a demand of ownership

Question 8

Differentiate Tax and Special Assessment

Answer 8

Tax is broadly imposed on a lot of things
Special Assessment is only imposed on land (and provided it is for public benefit)
Tax can be levied without expectation of direct proximate benefit

Question 8

These are the laws that grant immunity from taxation

Answer 8

Tax Exemption

Question 8

Differentiate Tax and Tariff

Answer 8

Tax is broader
Tariffs are only imposed on imports and exports

Question 8

Give some sources of Tax laws

Answer 8

Philippine Constitution
Statutes and Presidential Decrees
Judicial Decisions
Executive Orders and Batas Pambansa
Administrative Issuances
Tax Treaties
(The top overrides the statements from the others)

Question 9

Differentiate Tax and Licenses

Answer 9

Tax comes from the taxation power
Licenses come from the Police Power
If a business doesn’t pay its taxes, it has committed an illegal act.
If a business doesn’t pay its license, then the business itself becomes illegal, because its existence no longer becomes recognized as a lawful entity.

Question 10

These are the laws that provide for the assessment and collection of taxes

Answer 10

Tax Laws

Question 11

This type of administrative issuance is signed by the secretary of finance, upon recommendation of the commissioner of internal revenue.

Specifies the guidelines or defines rules and regulations for the effective enforcements of provisions of the national internal revenue code

Answer 11

Revenue Regulations

Question 12

This type of administrative issuance provides directives or instructions; prescribe guidelines; and outline processes, operations, and activities, workflows, methods and procedures necessary in the implementation of stated policies, goals, objectives, plans, and programs of the BIR in all areas of operations.

Answer 12

Revenue Memorandum Orders

Question 13

Rulings, Opinions of the CIR

Answer 13

Revenue Memorandum Rulings

Question 14

This type of administrative issuance publishes pertinent and applicable portions as well as amplifications of laws rules, regulations and precedents issued by the BIR and other agencies and offices.

Answer 14

Revenue Memorandum Circular

Question 15

What are the rules in Constructing Tax Imposing Laws?

Answer 15

• Public Purpose is Presumed
• Spirit of the law is considered (Analyze the true legislative intention)
• A statute will not be construed as imposing a tax unless it does so clearly, expressly and unambiguously
• In case of doubt, it is construed most strongly against the government, and liberally in favor of the taxpayer
• Tax laws operate prospectively unless the retrospective effect is expressly declared