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Taxation > General Principles > Flashcards

General Principles Flashcards

1
Q

What is Taxation?

A

Inherent power> sovereign through its law-making body> raises revenue> to defray the necessary expenses of government.

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2
Q

Characteristics of Taxation

A
  1. Inherent power
  2. Exclusively lodged with legislature
  3. Subject to Inherent, constitutional and contractual limitations
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3
Q

Nature of Taxation

A
  1. Plenary
  2. Comprehensive
  3. Awesome power that could destroy
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4
Q

What is Tax?

A

Enforced proportional contribution> person or property> levied by law-making body> in support of government> and for public needs.

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5
Q

Characteristics of Taxes?

A
  1. Enforced charged
  2. Generally payable in money
  3. Exclusively levied by the legislature
  4. Assessed in accordance> some reasonable rules of appointment
  5. Imposed by the state within jurisdiction
  6. Levied for public purpose
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6
Q

Purpose or Objective of Taxation?

A
  1. Raise Revenue > to promote general welfare and protection> citizens
  2. Non- Revenue
    a. Promotion of general welfare
    b. Regulation
    c. Reduction of social inequality
    d. Encourage economic growth
    e. Protectionism
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7
Q

Theories and Bases of Taxation?

A
  1. Lifeblood Theory- Importance
  2. Necessity Theory- Theory
  3. Benefits- Protection Theory- Basis
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8
Q

Aspects of Taxation

A
  1. Levy or Imposition (Tax legislation - congress)
  2. Enforcement or Administrations (Tax collection - executive e.g. BIR)
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9
Q

Scope of Legislative Taxing Power

A
  1. Amount or rate of tax
  2. Apportionment of the tax
  3. Kind of tax
  4. Method of collection
  5. Purposes of its levy, provided it is for public purpose
  6. Subject to be taxed, provided it is within its jursdiction
  7. Situs of taxation
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10
Q

Basic principles of a sound tax system?

A
  1. Fiscal Theory- sufficiency to meet gov expenditure
  2. Administrative feasibility- capability of being effectively enforced
  3. Theoretical Justice- based on taxpayer’s ability to pay (must be progressive)
  4. Consistency with Economic Goals
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11
Q

Classification of Taxes - as to subject matter

A
  1. Personal tax
  2. Property tax
  3. Excise tax
  4. Custom duties
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12
Q

Classification of Taxes - as to burden

A
  1. Direct tax- same person
  2. Indirect tax- two different
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13
Q

Classification of Taxes - as to purpose

A
  1. General tax- ordinary purpose
  2. Special tax- special purpose
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14
Q

Classification of Taxes - as to measure of application

A
  1. Specific tax- number
  2. Ad Valorem tax- value
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15
Q

Classification of Taxes - as to taxing theory

A
  1. National tax
  2. Local tax
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16
Q

Classification of Taxes - as to rate

A
  1. Progressive tax
  2. Regressive tax
  3. Proportionate tax
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17
Q

Amount charged for the cost and maintenance of the property used.

A

Toll

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18
Q

Punishment for the commission of a crime.

A

Penalty

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19
Q

Amount collected in lieu of criminal prosecution in cases of tax violations.

A

Compromise penalty

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20
Q

Levied only on land based wholly on benefit accruing thereon as a result of improvements or public works undertaken by government within the vicinity.

A

Special Assessment

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21
Q

Regulatory imposition in the exercise of the police power.

A

License Fee

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22
Q

Exaction designed to stabilize the currency.

A

Margin Fee

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23
Q

A sum of money due upon contract or one which is evidenced by judgment.

A

Debt

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24
Q

Legislative grant of money in aid of a private enterprise deemed to promote the public welfare.

A

Subsidy

25
Q

Duties charged upon commodities on their being transported into or exported from the country.

A

Customs duties and fees

26
Q

Broad term that includes taxes and income from other sources as well.

A

Revenue

27
Q

In its general sense, it signifies any tax, tribute or duty. In its limited sense, it means a duty on imported goods and merchandise.

A

Impost

28
Q

Imposes by a church or sect.

A

Tithe

29
Q

Imposes by a monarch

A

Tribute

30
Q

Limitations of Power of Taxation

A
  1. Inherent- very nature
  2. Constitutional- found in Consti or implied provisions
  3. Contractual- based on contract entered by the state and another
31
Q

A case filed by a bona fide taxpayer impugning the validity, legality of tax law or its implementation.

A

Taxpayer suit

32
Q

Inherent Limitations

A
  1. Public purposes of tax-
    Duty test and Promotion of general welfare test
  2. Non-delegability of taxing power
  3. Territoriality or Situs of taxation- within the jurisdiction
  4. Tax exemption of Government
  5. International Comity
33
Q

Exceptions to Non-Delegability

A
  1. Authority of the President to fix tariff, import and export
  2. Local government unit to levy taxes, fees and charges
  3. Delegation to administrative agencies for implementation and collection
34
Q

Factors to determine the Situs of Taxation

A
  1. Kind or classification of TAX being levied
  2. Situs of thing/ property taxed
  3. Citizenship of the taxpayer
  4. Residence of the taxpayer
  5. Source of Income tax
  6. Situs of the excise, privilege, business and occupation of being taxed
35
Q

Personal or Community Tax

A

Residence or domicile of the taxpayer

36
Q

Real property tax

A

Location of the property (Lex rei sitae)

37
Q

Personal property tax

A

Tangible: Where it is physically located/ permanently kept
Intangible: Subject to sec 104 NIRC

38
Q

Business tax

A

Place of business

39
Q

Excise or privilege tax

A

Where the act is performed or
Where occupation is pursued

40
Q

Sales tax

A

Where sale is consummated

41
Q

Income tax

A
  1. Citizenship
  2. Residence
  3. Source of income
42
Q

Transfer tax

A

Residence or citizenship of the taxpayer or
Location of the property

43
Q

Franchise tax

A

State which granted the franchise

44
Q

Corporate tax

A

Law on incorporation

45
Q

Constitutional Limitations

A
  1. Due process clause (Opportunity to be heard/ fair play/ substance and form)
  2. Equal protection clause
  3. Freedom of speech and of the press
  4. Non-infringement of religious freedom and worship
  5. Non-impairment of contracts
  6. Rule requiring appropriations, revenue and tariff bills shall originate exclusively from House of Representatives
  7. Uniformity, equality and progressivity of taxation
  8. Limitations on the congressional power to delegate to President the authority to impose tariff rates, import export quotas, etc
  9. Tax exemption of props actually, directly and exclusively for religious, charitable and educational purposes
  10. Voting requirement in connection with the legislative grant of tax exemption
  11. Non-impairment of jurisdiction of Supreme Court in tax cases
  12. Exemption from taxes of the revenues and assets of educational institutions, including grants, endowments, donations and contributions.
    Rule 1. Non-stock; non-profit organization;
  13. No profit will inure to the benefit of any member of the organization;
  14. Power of the President to veto any particular item or items in an appropriation, revenue, or tariff bill
  15. Necessity of an appropriation before money may be paid out of the public treasury
  16. Non-appropriation of public money or property for the use, benefit, or support of any sect, church, or system of religion
  17. Treatment of taxes levied for a special purpose
  18. Internal revenue allotments to local government units
46
Q

Rules: Contractual Limitations

A
  1. When the exemption is bilaterally agreed upon between the government and the taxpayer - it cannot be withdrawn without violating the non-impairment clause.
  2. When it is unilaterally granted by law and the same is withdrawn by virtue of another law.
  3. When the exemption is granted under a franchise - it may be withdrawn at any time.
47
Q

Taxing the same property twice when it should be taxed but once?

A

Double Taxation

48
Q

Double taxation in the objectionable or prohibited sense?

A

Direct Duplicate Taxation/Obnoxious

49
Q

Elements of Direct Duplicate Taxation/Obnoxious

A
  1. The same property or subject matter is taxed twice when it should be taxed only once.
  2. Both taxes are levied for the same purpose
  3. Imposed by the same taxing authority
  4. Within the same jurisdiction
  5. During the same taxing period
  6. Covering the same kind or character of tax.
50
Q

Legal/permissible. The absence of one or more of the above-mentioned elements makes the double taxation indirect.

A

Indirect Duplicate Taxation

51
Q

Remedies against Double Taxation

A
  1. Tax sparing rule
  2. Tax deductions e.g. vanishing deductions
  3. Tax credits
  4. Exemptions
  5. Treaties with other states
    -Principle of reciprocity e.g. intangible properties of NRA in estate and donor’s tax.
52
Q

The process by which the tax burden is transferred from the statutory taxpayer (impact of taxation) to another (incident of taxation) without violating the law.

A

Shifting

53
Q

IMPACT OF TAXATION

A

point on which tax is originally imposed.

54
Q

INCIDENTS OF TAXATION

A

point on which the tax burden finally rests or settles down.

55
Q

A mere increase in the value of the property is not income but merely an unrealized increase in capital. No income until after the actual sale or other disposition of the property in excess of its original cost.

A

Capitalization

56
Q

The 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

57
Q

The manufacturer or producer upon whom the tax has been imposed, fearing the loss of his market if he should add the tax to the price, pays the tax and endeavors to recoup himself by improving his process of production, thereby turning out his units at a lower cost.

A

Transformation

58
Q

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

A

Tax Evasion

59
Q

A grant of immunity to particular persons or corporations from the obligation to pay taxes.

A

Tax Exemption

Taxation (1 decks)

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