simple terms, it is the act of

to apportion the cost of

government among

those who, in some measure,

are privileged

to enjoy its benefits and must therefore

bear its burdens.

(a)  

Three inherent powers of the state

(a)  

primary purpose of taxation on the part of the government is

to provide funds or property with which to promote the general welfare

and the protection of its citizens and to enable it to finance Ils

multifarious activities. A government Can run its administrative set up

only through public lunding which is collected in the form of tax.

(a)  

While the primary purpose of taxation is to raise revenue for the

support of the government, taxation is often employed as a devise for

regulation or control (implementation of State's police power) by

means of which certain effects or conditions envisioned by the

government may be achieved such as;

a) Promotion of General Welfare

b) Reduction of Social Inequality

C) Economic Growth

(a)  

Purposes of taxation

(a)  

The power of taxation proceeds upon the theory that the existence of

government is a necessity —-. As stated in the case of

Phil. Guaranty Co., Inc. V. Commissioner (13 SCRA 775], is a power

predicated upon necessity. It is a necessary burden to preserve the

State's sovereignty and a means to give the citizenry an army to resist

aggression, a navy to defend its shores from invasion; a corps of civil

servants to serve, public improvements for the enjoyment of the citizenry.

and those which come within the State's territory and facilities and

protection which a government is supposed to provide.

(a)  

The power of taxation is essential because the government can

neither exist nor endure without taxation. "Taxes are the lifeblood of the

government and their prompt and certain availability is an imperious need

(—), The government cannot continue to perform its

basic functions of serving and protecting its people without means to pay

its expenses,

Consequently, the stale has the right to compel all its

citizens and property within its limits to contribute.

(a)  

The basis is the reciprgiald duties of protection and support between

the state and its inhabitants.he state collects taxes from the subjects of

taxation in order that it may be able to perform the functions of

government. The citizens, on the other hand, pay tax that they

may be secured in the enjoyment of the benefits of organized society. This

theory spawned the —which means,

taxes are what we pay for a civilized society (Commissioner v. Algue).

(a)  

—-since

claim for taxes is not a debt or contract, A distinguishinq feature of a

tax is that it is compulsory rather than a matter of bargain, If taxes

could be a subject of compensation or set off, it can easily give rise to

confusion and abuse, depriving the government of authority over the

manner by which taxpayers can credit and offset their tax liabilities.

(a)  

it is the power of the state for promoting public welfare by restraining and regulating the use of liberty and property. it may be excercise only by the government. the property taken in the exercise of this power is destroyed because it is noxious or intended for a noxious purpose.

(a)  

it is the power by which the state raises revenue to defray the necessary expenses of the governement

(a)  

it is the power of the state to acquire private property for public purposes upon payment of just compensation

(a)  

the power to tax is essentially legislative in nature. hence the right to select the object/subjects of taxation rests with the congress.

(a)  

the power to tax includes the power to destroy, where the tax is valid tax.

(a)  

Aspects of taxation

(a)  

Aspects of taxation

(a)  

Scope of the power of taxation

(a)  

as it covers persons businesses activities, professions, rights and privileges

(a)  

in the absence of limitations prescribed by the law or the constitution, the power to tax is unlimited and comprehensive. its force is so searching to the extent that the courts scarcely venture to declare that itis subject to any restrictions

(a)  

it is as complete: BIR may avail of certain remedies ensure collection of taxes.

(a)  

in so far as the selection of the subject of taxation

(a)  

Nature/characteristics of the state's power to tax

(a)  

exceptions to non delegations rule

(a)  

classification of taxes

As to scope

(a)  

classifiication of taxes

as to subject matter or object

(a)  

TAX of a fixed amount imposed upon individual whether citizens or not residing within a specified territory(e.g sedula)

(a)  

Tax imposed on property whether real or personal, in proportion either to its value, or in accordance with some other reasonable method of apportionment(e.g real state)

(a)  

Manifestation of the lifeblood theory

(a)  

it means that in the performance of its governement functions. the state cannot be estopped by the neglect of its agents/officers. erroneous application and enforcement of law by punlic officers to not block the subsequent correct application of the statues

(a)  

CLASSIFICATION OF TAX AS TO PURPOSE

(a)  

classification of tax as to graduation rates

(a)  

tax rate of which increases as the tax bracket increases (income tax)

(a)  

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

(a)  

classification of tax as to taxing authority

(a)  

classification of tax as to determination of amount

(a)  

tax of fix amount by the head or number or by some standard of weight or measurement (e.g exciase tax)

(a)  

tax of fixed proportion of the value of the property with respect to which the tax is assessed

(a)  

Elements of sound tax system

(a)  

the fundamental purpose of taxation is to raise revenue necessary to fund public services. consequently, it is necessary that the sources of revenue must be adequate to meet government expenditures and sustain the level of public services demanded by the citizens and policy makers

(a)  

Tax payers ability to pay must be taken into consideration the burden should be proportionate to the taxpayers ability to pay.

(a)  

tax laws must be capable of effective and effecient enforcement. a good tax system requires informed stakeholders who understand how taxes are assessed, collected and complied with. the TAX SYSTEM SHOULD BE AS SIMPLE AS POSSIBLE AND SHOULD MINIMIZE GRATUITOUS COMPLEXITY. COMPLICATED TAX RULES MAKESTHE TAX SYSTEM MORE DIFFICULT FOR CITIZENS TO UNDERSTAND.

(a)  

limitations on the states power to tax

(a)  

it is the congress which has the power to determine whether the purpose is public or private. a question on the validity of such tax measure may be raised before the courts on the ground that it is not for public purpose. however once it is settled that it is for public purpose, it can no longer be subject of inquiry

(a)  

Inherent limitations category

(a)  

this is one is synonymous to governmental purpose, a tax mus always be imposed for a public purpose otherwise it will declared as invalid. no tax law may be enacted for the purpose of raising revenue for private purposes. the purpose should affect the inhabitants of the state or taxing district as a community and not merely as individuals

(a)  

what cannot be delegated is the legislative enactment/imposition/levying of tax measure. however as regards to administrative implementation of tax law(i.e assessment, collection, valuation of property tax purposes that can be delegated)

(a)  

constitutional limitations category

(a)  

the power to tax should not be harsh oppressive or confiscatory. this limitation is also known as the right to notice and hearing.

(a)  

all persons subject to legislation shall be treated alike under similar circumstances and conditions both in the privileges conferred and liabilities imposed.

(a)  

it requires the uniform application and operation without discrimination of the tax in every place where the subject of the tax is found. however require absolute identity or equality under all circumstances but subject to reasonable classification

(a)  

mean that the tax laws shall place emphasis on direct tax rather than indirect tax which ability to pay as the principal criterion.

(a)  

refers to tax rates which decreases as the tax base or bracket increases. exist when there are more indirect taxes imposed than direct taxes

(a)  

no person shall be imprisoned for debt or non payment of poll tax. the imprisonment rule applies to non payment of poll tax which is punishable only by surcharge, but not to other violations like falsification of community tax certificate and non payment of other taxes. Poll tax is a fixed amount imposed on residents within a specific territory regardless of citizenship, business or profession

(a)  

a fixed amount imposed on residents within a specific territory regardless of citizenship, business or profession

(a)  

no law impairing the obligation of contracts shall be passed. the obligation of a contract is impaired when its terms and conditions are changed by law or by a party without the consent of the other , thereby weakening the position of rights of the latter.

(a)  

no law shall be made respecting an establishment of religion or prohibiting the free exercise thereof the free exercise and enjoyment of religious profession and worship without discrimination or preference, shall forever be allowed. no religious test shall be required for the exercise of civil or political rights.

(a)  

no public money or property shall be appropriated applied paid or employed directly or indirectly for the use benefit or support of any church denomination, secretarian institutions or system of religion or of any priest, preacher, minister, or other religious teacher or dignitary as such except when such priest precaher minister or dignitary is assigned to the armed forces or to any institution or government orphanage or leprosarium

(a)  

Charitabie institutions, churches and parsonages Dr convents appurtenant thereto, mosques, non-profit cemeteries, and all lands, buildings and improvements, actually, directly, and exclusively used for religious, charitable, or educational purposes shall he exempt from taxation, This is an exemption from real property tax Only The exemption in favor of proper UsEd exclusively for charitable or educational purposes is not limited to property actually indispensable The test of exemption refers to actual use NOT ownership. The term "exclusively* should be interpreted "primarily* rather than "solely*

(a)  

All revenues and assets of non- stock, non-profit educational institutions used actually, directly, and exclusively for educational purposes shall be exempt from Taxes and duties, However. They shall be subject to internal revenue tax on income from trade, business or other activity, the conduct of which is not related to the exercise or performance by such educational institution

(a)  

revenue bills shall originate exclusively from the ----

(a)  

alL appropriation, revenue or tart bills, bills authorizing an increase of the public debt, bills of local application, and private bills shall originate exclusively in the ---, but the Senate may propose or concur with amendments. The Constitution simply means that the initiative for the fling of bills must

(a)  

this limitation does not mean that the press is exempt form taxation. taxation constitutes an infringement of press freedom when it operates as a prior restraint to the exercise of this constitutional right. when the tax is imposed on the receipts of the income of the press it is a valid exercise of the sovereign prerogative

(a)  

Tax exemptions, such as "grant of franchise" may be revoked by another law as it is specifically provided in the Constitution that the grant of any franchise is always subject to amendment, alteration, or repeal by the Congress when the common good so requires.

(a)  

Literally, -- means "place* of taxation, It is the state Or political unit which has jurisdiction to Impose a particular tax. The state where the subject to be taxed has a situs may rightfully levy and collect the tax. The situs is necessarily in the state which has jurisdiction or which exercises dominion over the subject in question.

(a)  

--- is an enforced proportional contribution from owners of lands for special benefits resulting from public improvements. , is a levy on property which derives some special benefit from the improvement. Its purpose is to finance such improvement, thus accruing only to the owners hereof who, after all, pay the assessment. It is NOT A TAX measure intended to raise revenues for the government because the proceeds thereof may be DEVOTED TO the SPECIFIC PURPOSE for which the assessment was authorized

(a)  

characteristics of special assessment

(a)  

pecuniary aid directly granted the government to an individual or private commercial enterprise deemed beneficial to the public, NOT A TAX ALTHOUGH TAX MAY HAVE TO BE IMPOSED TO PAY IT.

(a)  

are taxes imposed on goods exported from or imported into a country

(a)  

In its strict sense, -- referred to is direct duplicate taxation, In its broad sense, --- is referred to as indirect double taxation. It extends to all cases in which there is a burden of two or more impositions.

(a)  

double taxation is referred to as ---

(a)  

There is --(Broad Sense -which is nöt prohibited by the constitution) if any of the elements described above is not present. Unlike the United States Constitution, our Constitution DOES NOT EXPRESSLY PROHIBIT direct double taxation. HOweVeR it is SOMETHING NOT FAVORED. Such taxation should, whenéver possible, be avolued and prevented.

(a)  

means of avoiding or minimizing the burden of taxation

(a)  

is the transfer of the burden of a tax by the original payer or the one on whom the tax was assessed or imposed to someone else. Transferred is not the payment of the tax but the burden of the tax. Only indirect taxes may be shifted; direct taxes cannot be shifted.

(a)  

An escape from taxation where the producer or manufacturer pays the tax and endeavor to recoup himself by improving his process of production thereby turning out his units of products at a lower cost

(a)  

-- is the use by the taxpayer of illegal or fraudulent means to defeat or lessen the payment of a tax. IL is also known as tax dodging " It is connotes fraud through the use of pretenses or forbidden devices to lessen or defeat taxes. Example: Deliberate failure to report a taxable income or property;

(a)  

--is the exploitation by the taxpayer of LEGALLY PERMISIBLE alternative tax rates or methods of assessing taxable property or income in order to avoid or reduce tax liability. It is politely called "tax minimization" and is not punishable by law

(a)  

tax avoidance is the exploitation by the taxpayer of LEGALLY PERMISIBLE alternative tax rates or methods of assessing taxable property or income in order to avoid or reduce tax liability. It is politely called "---" and is not punishable by law

(a)  

it is the grant of immunity to particular persons of corporations or to persons of corporations of a particular class from a tax which persons and corporations generally within the same state or taxing district are obliged to pay. It is an immunity of privilege; it is freedom from a financial charge or burden o which others are subjected ---- is allowed only it there is a clear provision therefor. It is not necessarily discriminatory as long as there is a reasonable foundation or rational basis. In the construction of tax statutes, exemptions are not favored and are construed against the taxpayer.

(a)  

Kinds of exemption as to basis

(a)  

Immunities from taxation which originate from the constitution.

(a)  

immunities from taxation which emanates from legislation

(a)  

kinds of exemption as to form

(a)  

Exemptions expressly granted by statute.

(a)  

When particular persons, property, or rights are deemed exempt as they fall outside the scope of the taxing provision itself.

(a)  

kinds of exemption as to extent

(a)  

Connotes absolute immunity.

(a)  

One where a collection of a part of the tax is dispensed with

(a)  

It is the general or intentional overlooking by the Stale of its authority to impose penalties on persons otherwise guilty of evasion or violation of a revenue or tax law. it partakes of an ABSOLUTE FORGIVENESS OR WAIVER of the Government of Its right to collect. It is a way to give tax evaders, who wish to relent and are willing to reform à chance to do so. ---involves IMMUNITY from all criminal, civil and administrative liabilities, from non-payment of taxes.

(a)  

The reduction in the selling price of income producing property by an amount equal to the capitalized value of future taxes that may be paid by the purchase

(a)  

--- is the tax saving device within the means sanctioned by law. This method should be used by the taxpayer in good faith and at arm's length, Tax evasion, on the other hand, is a SCHEME used outside of those lawful means which is not acceptable.

(a)  

, on the other hand, are the enforced proportional contributions or charges 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.

(a)  

WHO ARE THE NON RESIDENT CITIZEN SEC 22. E

(a)  

- are natural persons with income derived for within the territorial jurisdiction on taxing authority. Under the Tax Code (NIRC), Individual taxpayers are classified

(a)  

Individual Taxpayers are nafural persons with income derived for within the territorial jurisdiction on axing authority. Under the Tax Code (NIRC), Individual taxpayers are classified as:

(a)  

Under Section 1, Aticle lII of the Philippine Constilate is a natural person who is/has

1 Born (by birth) with father and/or mother as Filipino Cilizens:

2. Born before —— of Filipino mother who erects Philippine cifizenship upon reaching the age of majority

3. Acquired Philippine citizenship after birth (naturalized, in accordance with Philippine Laws.

(a)  

Non resident citizens of the Philippines is A citizen of the Philippines who shall have stayed outside the Philippines for —-days () or more by the end of the year (aggregate).

(a)  

—-of the Philippines

——of the NIRC describes a nonresident citizen as a cilizen who:

Estabishes, to the satistaction or the Commissioner of Internal Revenue, the fact of his physical presence abroad with a definite intention to reside therein

(a)  

For income taxation purpose

, OFWs are classified as —-

(a)  

—-

A Filipino citizen taxpayer not classified as nonresident citizen is considered a —-for tax purpose

(a)  

An —- is a foreign-born person who is not qualified to acquire

Philippine citizenship by birth or after birth

(a)  

of the Tax Code defines —- as an individual whose residence is within the Philippines and who is not a citizen thereof Aliens. who are actually present

in the Philionines and who

are not mere transients.

sojoumers classified

—-

An alien who lives in the

Philippines will no definite a tention as to his stay is also a —-

(a)  

The term "—- under Section —ofthe Tax Code means an individual whose residence is not in the Philippines and who is not a citizen thereof. They are aliens who come to the Philippines for a DEFINITE PURPOSE which in its NATURE ay be promptly accomplished. They are aliens-whin are mere Transients non-residents hence, classified as -

(a)  

Aliens who stayed in the Philippines for an aggregate period of more —-days during the taxable yeat and/or aliens who have business

income

at the Philippines are considered as nonresident aliens engaged in

Trade or business. Section —- of the Tax Code, "trade or business Include performance of the functions of a public office or performance of personal services in the Philippines (except performance of services by the taxpayer as an employee. If an alien stays in the Philippines for only — days or less.

not derived business income in the Philippines, he IS

considered to as a —-not engaged in trade or business:

(a)  

A nonresident alien not engaged in trade or business is subject to

—% income tax based on gross income fom all sources within the Philippines (ordinary income or passive income except for income subject lo capital gains tax) as interest,

(a)  

Applicable Taxes and Tax Rates

The applicable taxes for individuals depend on several factors such as but not limited to:

(a)  

Tuldok

(a)  

As to who bears the burden

(a)  

tax which is demanded from the person who also shouters the burden of tax or tax which the taxpayer cannot shift to another, Bolin the incidence (liabilly for the payment of the tax) as well as the impact or burden of the tax falls on the same person (e.g. income tax, estate tax, donor's tax).

(a)  

tax which is demanded from one person in the expectation and intention that he shall indemnity himself at the expense of another. These are laxes wherein the incidence of or the liabilty for the payment of the tax falls on one person but the burden thereof can be shifted or passed on to another person (e.g. VAT, percentage tax, excise tax on exciseable articles), in the case of Maceda v. Macaraig

(197 SCRA 771), an indirect tax is defined as one paid by a person who is not directly liable therefor, and who may therefore shift or pass on the tax to another person or entity, which ultimately assumes the tax burden.

(a)  

Read tuldok

(a)  

—- or License is a charge imposed under the police power for purposes of regulation.

(a)  

—- is a sanction imposed as a punishment for violation of law or acts deem injurious. The violation of tax may give right to imposition of penalty.

(a)  

Internal revenue laws are not —- in nature. Tax laws are —- and NOT penal in nature, although there are penalties provided for their violation. The purpose of tax laws in imposing penalties for delinquencies is to compel the timely payment of taxes or to punish evasion or neglect of duty in respect thereof.

(a)  

The stall, having sovereignty, can enforce contributions unton (tac) even in the absence of a constitutional provision because the state has the Supreme power to command and enforce obedience to its will from the people within its jurisdiction.

(a)  

The power to tax (levying or imposition) is peculiarly and exclusively legislative in nature. It cannot be exercise by the executive or judicial branches of the government.

(a)  

A — is a sum of money for the use of something, generally applied to the consideration, which is paid of the use of a road, bridge or the like of a public nature.

(a)  

It is one brought or filed by a taxpayer arguing the validity of a tax statute and its enactment or the constitutionality of its alieged public purpose. it is a case where the act complained of directly involves the illegal disbursement of public funds derived from taxation. Taxpayers have locus standi to question the validity of tax measures or ilegal expenditures of public money. In such cases, they are parties in interest who will be prejudiced or benefited by the avails of the suit.

(a)  

It is one brought or filed by a taxpayer arguing the validity of a tax statute and its enactment or the tax Taxpayer’s suit constitutionality of its alieged public purpose. it is a case where the act complained of directly involves the illegal disbursement of public funds derived from taxation. Taxpayers have ——to question the validity of tax measures or ilegal expenditures of public money. In such cases, they are parties in interest who will be prejudiced or benefited by the avails of the suit.

(a)  

It means that in the performance of its governmental functions,

The state cannot be estopped by the neglect of its agents/officers.

• Erroneous application and enforcement of law by public officers do not block the subsequent correct application of statutes.

(a)  

Under section 218 of the Tax Code (as amended), no court, except the —- (through administrative remedies when collection could jeopardize the interest of the government or taxpayer - Section 11, RA 1125), shall have the authority to grant an injunction to restrain the collection of any national internal revenue tax, fee or charge imposed by the tax code.

(a)  

Certain aspects of the taxing process that are not really legislative in nature are vested in administrative agencies such as:

Power to value property

.

.

Power to assess and collect taxes

Power to perform details of computation, appraisement or adjustment; among others.

(a)  

—— is necessary in order that governmental functions will not be impeded. Otherwise, the government will be taxing itself to raise money for itself. The following rules shall apply in determining whether or not goverment entities and agencies are subject to tax:

a. Agencies performing govemmental functions are tax exempt unless expressly taxed

b.

Agencies performing proprietary functions are subject to tax unless expressly exempted.

c. GOCCs performing proprietary functions are subject to tax, however the following were granted tax exemptions:

• Government Service Insurance System (GSIS)

.

Social Security System (SSS)

.

.

Phitippine Health Insurance Corporation (PHIC)

.

Philippine Charity Sweepstakes Office (PCSO)

Local Water Districts (RA 10026)

(a)  

——(Polite and friendly agreements] among nations)

by another state due to:

Under international law, property of a foreign state may not be taxed Sovereign equality of states.

.

When one stale enters the territory of another state, there is a

.

implied understanding that the former does not intend to denigrate

As dignity by placing itself under the jurisdiction of the other state.

Immunity from suit of a state

(a)  

any tax which does not fall within the classification of a poil tax or a property tax. This is a tax on the exercise of certain rights and privileges (e.g. income tax, estate tax, donor's tax), — may also refer to the tax levied or imposed on sin products and nonessential goods such as cigars and liquors (Discussed in volume 2 - Transfer and Business Taxes). Excise taxes of this nature are taxes applicable to certain specified articles or products manufactured in the Philippines for domestic sale or consumption or any other disposition and to specified things or goods imported into the Philippines. It may be specific or ad valorem

(a)  

tax which is demanded from one person in the expectation and intention that he shall indemnify himself at the expense or another. These are taxes wherein the incidence of or the liability for the payment of the tax falls on one person but the burden thereof can be shifted or passed on to another person (e.g. VAT, percentage tax. excise tax on exciseable articles). in the case of Maceda v. Macaraig

(197 SCRA 771), an indirect tax is defined as one paid by a person who is not directly liable therefor, and who may therefore shift or pass on the tax to another person or entity, which ultimately assumes the

tax burden.

(a)  

No person shall be imprisoned for debt or non-payment of poll tax. The non-imprisonment rule applies to non-payment of poll tax which is punishable only by a ——, but not to other violations like falsification of community fax certificate and non-payment of other taxes.

(a)  

The veto of appropriation, revenue, tariff bills by president

The President shall have the power to veto any particular item or items in an appropriation, revenue, or tariff bill, but the veto shall not affect the item or iters to which he does not object. An item in a BILL refers to particulars, details, the distinct and severable parts of a bill. in BUDGETARY LEGISLATION an item is an individual sum of money dedicated to a stated purpose. )tuldok

(a)  

An item in a —— refers to particulars, details, the distinct and severable parts of a bill. In budgetary legislation, an item is an individual sum of money dedicated to a stated purpose.

(a)  

An item in a BILL refers to particulars, details, the distinct and severable parts of a bill. in —-, an item is an individual sum of money dedicated to a stated purpose.

(a)  

Non-impairment of the Supreme Court (SC) jurisdiction

Congress cannot take away from the Supreme Court the power given to it by the Constitution as the FINAL ARBITER OF TAX CASES The Supreme Court shall have the following powers: ————, or AFFIRM ON APPEAL or —-, as the law or the Rules of Court may provide, final judgments and orders of lower courts in all cases involving the legafity of any tax, impost, assessment, or toll, or any penalty imposed in relation thereto.

(a)  

Bashai tuldok

(a)  

- refers to all the funds or income derived by the government, whether from tax or any other source.

(a)  

Tax evasion is the use by the taxpayer of illegal or fraudulent means to defeat or lessen the payment of a tax. It is also known as —-." It is connotes fraud through the use of pretenses or forbidden devices to lessen or defeat taxes. Example: . Defiberate failure to report a taxable income or property:

deliberate reduction

(a)  

Tax laws are —-and prevail over a —-

(a)  

APPLICATION OF TAX LAWS

General rule: Tax laws are —- in operation because the nature and amount of the tax could not be foreseen and understood by the taxpayer at the time the transactions which the law seeks to tax was completed.

(a)