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TAX > Fundamental Principles > Flashcards

Fundamental Principles Flashcards

1
Q

The act of levying a tax to apportion the cost of the government among those who are privileged to enjoy its benefits and must therefore bear its burden.

A

Taxation

The State can still exercise the power even if not mentioned in the constitution.

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2
Q

Inherent Powers of the State

A
  1. Police Power
  2. Power of Taxation
  3. Power of Eminent Domain
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3
Q

Power of the state that promotes public welfare by restraining or regulating the use of liberty and property.

A

Police Power

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4
Q

Power of the state that raises revenue to defray the necessary expenses of the government

A

Power of Taxation

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5
Q

Power of the State to acquire private property for public purpose upon payment of just compensation

A

Power of Eminent Domain

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6
Q

Similarities among the 3 inherent powers of the State

A
  1. Inherent
  2. Exist independently of the constitution
  3. Ways by which the State interfere with private rights and property
  4. Legislative in nature and character
  5. Presuppose an equivalent compensation
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7
Q

Primary Purpose

A

Revenue or Fiscal Purpose

A government can run its administrative set up only through public funding which is collected in the form of tax.

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8
Q

Secondary Purpose

A

Regulatory Purpose

Sumptuary/Compensatory

A devise for regulation or control by means of which certain effects or conditions envisioned by the government may be achieved such as:

  • Promotion of general welfare
  • Reduction of social inequality
    Economic growth
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9
Q

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 forthe enjoyment ofthe citizenry, and those whichcome within the State’s territory and facilities and protection which a government is supposed to provide.

A

Necessity Theory
Theory of taxation

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10
Q

“Taxes are the lifeblood of the government and their prompt and certain availability is an imperious need”

A

Lifeblood Doctrine
Theory of Taxation

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11
Q

The state collects taxes from the subjects of taxation in order that it may be able to perform the functions of government

A

Benefits Received or Reciprocity Theory
Basis of Taxation

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12
Q

“Taxes are what we pay for a civilized society”

A

Doctrine of Symbiotic Relationship

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13
Q

A distinguishing feature of a tax is that it is a matter of bargain rather than compulsary

A

FALSE

baliktad mhie

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14
Q

The government and the taxpayer are not mutual creditor and debtor of each other

A

TRUE

An exception to the rule is where both the claims of the government and the taxpayer against each other have already become due, demandable, and fully liquidated

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15
Q

The right to select the objects/subjects rests with the President.

A

FALSE

Congress

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16
Q

The power to tax includes the power to destroy

A

TRUE

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17
Q

In the absence of limitations, the power to tax is considered as _____, _____, _____ and _____.

A

a. Comprehensive - as it covers persons, businesses, activities, professions, rights and privileges.

b. Unlimited - the power to tax is unlimited and comprehensive.

c. Plenary - as it is complete

d. Supreme - in so far as the selection of the subject of taxation.

CUPS

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18
Q

Taxes should be based on the ability to pay

A

Theoretical justice

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19
Q

The power of imposing a tax is purely a ______ function.

A

LEGISLATIVE

Congress cannot delegate such power

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20
Q

Aspects of Taxation

LAC

A
  1. Levying or imposition - legislative act
  2. Assessment or determination of the correct amount of applicable tax
  3. Collection of tax

2&3 are executive functions

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21
Q

Nature/Characteristics of the State’s Power to Tax

A
  1. It is inherent in sovereignty
  2. It is legislative in character
  3. Exemption of government entities, agencies, and instrumentalities
  4. International Comity
  5. Limitation on territorial jurisdiction
  6. Strongest among the inherent powers of the State
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22
Q

Delegation to the President

A

Congress may authorize by law, the President to fix, within the specified limits and subject to such limitations and restrictions as it may impose:

a. Tariff rates
b. Import and export quota
c. Tonnage and wharfage dues; and
d. Other duties or imposts within the framework of the national development program of the government.

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23
Q

Delegation to local government units

A

The power of local government units to impose taxes and fees is always subject to the limitations which Congress may provide.

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24
Q

May the Congress abolish the power to tax of LGUs?

A

NO.

The only authority conferred to Congress is to provide the guidelines and limitations on the LGUs’ exercise of the power to tax

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25
Q

Aspects of taxing process which are NOT legislative in nature

A
  • Power to value property
  • Power to assess and collect taxes
  • Power to perform details of computation, appraisement or adjustment

These powers are vested in ADMINISTRATIVE agencies

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26
Q

Exemption of government entities, agencies and instrumentalities.

A
  1. Governmental functions - TAX EXEMPT
  2. Proprietary functions - SUBJECT TO TAX
  3. GOCCs performing proprietary functions - subject to tax except:
    • GSIS, SSS, PHIC, Local Water Districts, HDMF or PAG-IBIG
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27
Q

Under international law, property of a foreign State may not be taxed by another State due to:

A
  • Sovereign equality of States
  • When one State enters the territory of another State, there is an implied understanding that the former does not intend to denigrate its dignity by placing itself under the jurisdiction of the other State
  • Immunity from suit of a State
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28
Q

Tax laws can operate beyond a State’s territorial limits.

A

FALSE.

It cannot

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29
Q

Fixed amount imposed upon individual, whether citizens or not, residing within a specified territory without regard to their property or the occupation in which he may be engaged

A

Personal, poll or capitation

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30
Q

Imposed on property, whether real or personal, in proportion either to its value, or in accordance with some other reasonable method of apportionment

A

Property tax

31
Q

Tax levied or imposed on sin products and non-essential goods such as cigars and liquors

A

Excise tax

32
Q

Tax levied or imposed on sin products and non-essential goods such as cigars and liquors

A

Excise tax

33
Q

Tax levied or imposed on sin products and non-essential goods such as cigars and liquors

A

Excise tax

34
Q

Demanded from the person who also shoulders the burden of tax or tax which the taxpayer cannot shift to another

A

Direct tax

35
Q

Demanded from one person in the expectation and intention that he shall indemnify himself at the expense of another

A

Indirect tax

36
Q

Imposed by the head or number or by some standard of weight or measurement

A

Specific tax

37
Q

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

A

Ad-valorem tax

38
Q

Increases as the tax base or bracket increases

A

Progressive or graduated

39
Q

Decreases as the tax base or bracket increases

A

Regressive

40
Q

The sources of revenues must be adequate to meet government expenditures

A

Fiscal Adequacy

41
Q

The tax burden should be proportionate to the taxpayer’s ability to pay

A

Theoretical justice

42
Q

The tax system should be as simple as possible, and should minimize gratuitous complexity.

A

Administrative Feasibility

43
Q

Restrictions arising from the very nature of the power to tax itself

A

Inherent Limitations

44
Q

Inherent Limitations

D-PINES

A

a. Direct double taxation
b. Purpose must be public in nature
c. International comity
d. Non-delegability of the taxing power
e. Exemption of government from tax
f. Situs of taxation or Territorial limitations

45
Q

There must be a valid law and the measure should not be unconscionable and unjust as to amount to confiscation of property

A

Due process of law

46
Q

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

A

Equal protection of laws

47
Q

It requires the uniform application and operation without discrimination, of the tax in every place where the subject of the tax is found.

A

Rule of uniformity and equity in taxation

48
Q

No person shall be imprisoned for debt or non-payment of poll tax.

A

TRUE.

Punishable only by a surcharge

49
Q

Charitable institutions, churches and parsonages or convents appurtenant thereto, mosques, non-profit cemeteries, and al lands, buildings and improvements, actually, directly, and exclusively used for religious, charitable, or educational purposes shall be exempt from taxation.

A

TRUE.

Exemption from real property only

50
Q

All revenues and assets of non-
stock, non-profit educational institutions Nonprofit non-stock used actually, directly, and exclusively for educational purposes shall b exempt from taxes and duties.

A

TRUE.

*Unless activities are not for educational purposes**

51
Q

No law granting any tax exemption shall be passed without the concurrence of ______ of all members of the congress.

A

MAJORITY

52
Q

The President shall have no power to veto any particular item or items in an appropriation, revenue, or tariff bill

A

FALSE.

may power siya

53
Q

Final arbiter of tax cases

A

Supreme Court

54
Q

Where shall the initiative for the filing of bills come from?

A

House of Representatives

55
Q

Can the Senate propose or concur with amendments?

A

YES.

So long as action by the Senate as a body is withheld pending receipt of the House bill.

56
Q

Place of taxation

A

Situs of taxation

57
Q

Based on cost of construction or maintenance of the public improvement used.

A

Toll

58
Q

Sanction imposed as a punishment for violation of law or acts deem injurious

A

Penalty

59
Q

Pecuniary aid directly granted the government to an individual or private commercial enterprise deemed beneficial to the public

A

Subsidy

60
Q

Pecuniary aid directly granted the government to an individual or private commercial enterprise deemed beneficial to the public.

A

Subsidy

61
Q

Charge imposed under the police power for purposes of regulation

A

Permit or license

62
Q

Double taxation

A

Strict sense - DIRECT duplicate taxation
Broad sense - INDIRECT duplicate taxation

Direct double taxation means taxing TWICE
1. By the same taxing authority
2. For the same purpose
3. In the same year or taxing period
4. Same subject or object
5. Same kind/character of the tax

63
Q

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.

A

Shifting

64
Q

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

Transformation

65
Q

The use by the taxpayer of illegal or fraudulent means to defeat or lessen the payment of a tax

A

Tax Evasion or Tax Dodging

66
Q

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.

A

Tax Avoidance or Tax Minimization

67
Q

Grant of immunity to particular persons or corporations or to persons or corporations of a particular class from a tax which persong and corporations generally within the same State or taxing district are obliged to pay.

A

Exemption

Allowed only if there is a clear provision

68
Q

Seller is willing to lower the price of the commodity provided the taxes will be shouldered by the buyer.

A

Capitalization

69
Q

Ambiguities on Statute and regulations

A

Strictly construed against the government, liberally in favor of the taxpayer

SAGLIT

70
Q

Exemptions and Deductions

A

Strictly construed against the taxpayer, liberally in favor of the government

SATLIG

71
Q

This provides that a taxpayer suit can only be allowed if the act involves a direct and illegal disbursement of public funds derived from taxation.

A

Taxpayer’s suit

72
Q

All items of gross income and deductions are reported in one income tax return and the applicable tax rate is applied on the tax base.

A

Global System

73
Q

Different types of income are subject to different sets of graduated or flat income tax rates.

A

Schedular System

TAX (6 decks)

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