GLOSSARY OF TERMS: CHAPTER 1-GENERAL PRINCIPLES 1.

TAXATION - IS THE PROCESS OR MEANS BY WHICH THE SOVEREIGN, THROUGH ITS LAWMAKING BODY, RAISES INCOME TO DEFRAY THE NECESSARY EXPENSES OF THE GOVERNMENT. 2.NECESSITY THEORY -THE THEORY THAT THE EXISTENCE OF GOVERNMENT IS A NECESSITY. 3.BENEFIT-RECEIVED THEORY THE THEORY THAT STATES THAT THERE ARE RECIPROCAL DUTIES OF PROTECTION AND SUPPORT BETWEEN THE STATE AND ITS INHABITANTS. 4. NON-DIVERSION -TAX MONEY COLLECTED FOR SPECIAL PURPOSE MUST BE APPLIED ONLY FOR THAT PURPOSE 5. PERSONAL, POLL OR CAPITATION TAX -TAX OF A FIXED AMOUNT IMPOSED ON INDIVIDUALS RESIDING WITHIN A SPECIFIED TERRITORY WITHOUT REGARD TO THEIR PROPERTY OR THE OCCUPATION IN WHICH THEY MAY BE ENGAGED. -EXAMPLE: COMMUNITY TAX (FORMERLY RESIDENCE TAX) OR CEDULA. 6. PROPERTY TAX -TAX IMPOSED ON PROPERTY, WHETHER REAL OR PERSONAL, IN PROPORTION EITHER TO ITS VALUE OR WITH SOME OTHER REASONABLE METHOD OF APPORTIONMENT. -EXAMPLE: REAL ESTATE TAX 7. EXCISE OR PRIVILEGE TAX

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EXAMPLES: COMMUNITY TAX.EXAMPLES: INCOME TAX.EXAMPLES: BUSINESS TAXES. -EXAMPLES: EXCISE TAXES ON DISTILLED SPIRITS. PERCENTAGE TAX 8. CUSTOMS DUTIES 10. THE ENJOYMENT OF PRIVILEGE OR THE ENGAGING IN OCCUPATION. GENERAL.-TAX IMPOSED UPON THE PERFORMANCE OF AN ACT.EXAMPLES: PROTECTIVE TARIFFS ON IMPORTED GOODS 14. FISCAL OR REVENUE TAX -TAX IMPOSED TO RAISE REVENUE FOR THE GOVERNMENT. CIGARS. DIRECT TAX -TAX WHICH IS DEMANDED FROM THE PERSON WHO IS INTENDED TO PAY IT. OR BY SOME STANDARD OF WEIGHT OR MEASUREMENT. . NATIONAL TAX 2 . . INCOME TAX 12. BUSINESS TAXES 13. . SPECIAL OR REGULATORY TAX -TAX TO ACHIEVE SOME SOCIAL OR ECONOMIC ENDS IRRESPECTIVE OF WHETHER REVENUE IS ACTUALLY RAISED OR NOT. SPECIFIC TAX -TAX OF A FIXED AMOUNT IMPOSED BY HEAD OR NUMBER. .EXAMPLES: INCOME TAX. VALUE -ADDED TAX . AD VALOREM TAX -TAX OF A FIXED PROPORTION OF THE AMOUNT OR VALUE OF PROPERTY WITH RESPECT TO WHICH THE TAX IS ASSESSED. INCOME TAX 9. -EXAMPLES: REAL ESTATE TAX. CUSTOMS DUTIES. INDIRECT TAX -TAX WHICH THE TAXPAYER CAN SHIFT TO ANOTHER . CIGARETTES 11.

FLOOD TAX 16.SITUS OF TAXATION -PLACE OF TAXATION OR THE STATE OR POLITICAL UNIT W/C HAS JURISDICTION TO IMPOSE TAX OVER ITS INHABITANTS 21. . POLICE POWER -THE POWER TO PROTECT CITIZENS AND PROVIDE FOR SAFETY AND WELFARE OF SOCIETY 22.EXAMPLES: REAL ESTATE TAX. TRADES OR OFFICES OR A TAX ON A PERSON’S INCOME.A TAX ON ALL YEARLY PROFITS ARISING FROM PROPERTY. PROFITS AND THE LIKE. DONOR’S TAX 18. ESTATE TAX. VAT. PROFESSIONS. PROPORTIONAL -TAX BASED ON A FIXED PERCENTAGE OF THE AMOUNT OF PROPERTY. EMINENT DOMAIN POWER 3 . DONOR’S TAX. MUNICIPAL OR LOCAL TAX -TAX IMPOSED BY MUNICIPAL CORPORATIONS OR LOCAL GOVERNMENTS. ETC. REGRESSIVE TAX -TAX THE RATE OF WHICH DECREASES AS TAX BASE INCREASES 19.INCOME TAX . PROGRESSIVE OR GRADUATED TAX -TAX THE RATE OF WHICH INCREASES AS THE TAX BASE INCREASES. EMOLUMENTS. -EXAMPLES: TAX ON OCCUPATIONS.) 15. INCOME OR OTHER BASIS TO BE TAXED. VAT. 17.-TAX IMPOSED BY NATIONAL GOVERNMENT. 20. -EXAMPLES: INCOME TAX. -EXAMPLES: NIRC-COVERED TAXES(INCOME TAX.

INHERENT LIMITATIONS -NATURAL RESTRICTIONS TO SAFEGUARD AND ENSURE THAT THE POWER OF TAXATION SHALL BE EXERCISED BY THE GOVERNMENT ONLY FOR THE BETTERMENT OF THE PEOPLE WHOSE INTEREST S/B SERVED. INTERNATIONAL COMITY -COURTEOUS RECOGNITION. INTERACTION AND RESPECT ACCORDED BY ONE NATION TO THE LAWS AND INSTITUTIONS OF ANOTHER 24. FRIENDLY AGREEMENT. ITEM VETO -THE POWER TO VETO ITEMS IN APPROPRIATION BILLS WITHOUT AFFECTING OTHER PROVISIONS OF SUCH BILLS 29.-THE POWER TO TAKE PRIVATE PROPERTY (WITH JUST COMPENSATION) FOR PUBLIC USE 23. PLENARY. EQUAL PROTECTION OF LAW -ALL PERSONS SUBJECT TO LEGISLATION SHALL BE TRETED ALIKE UNDER SIMILAR CIRCUMSTANCES AND CONDITIONS BOTH IN THE PRIVILEGES CONFEREED AND LIABILITIES IMPOSED 27. UNIFORMITY RULE OF TAXATION -TAX OPERATES WITH THE SAME FORCE AND EFFECT IN EVERY PLACE WHERE THE SUBJECT MAY BE FOUND 28. DISCRIMINATORY DUTY 4 . UNLIMITED AND COMPREHENSIVE EXERCISE BY THE STATE OF ITS INHERENT POWER TO TAX 26. ENHANCED AND PROTECTED 25. CONSTITUTIONAL LIMITATIONS -PROVISIONS OF THE CONSTITUTION THAT RESTRICT THE SUPREME. POCKET VETO -THE POWER TO DISAPPROVE LEGISLATIVE ACT BY THE PRESIDENT WITH THE RESULT THAT BILLS SHALL FAIL TO BECOME LAWS 30.

DOUBLE TAXATION -ACT OF THE SOVEREIGN BY TAXING TWICE FOR THE SAME PURPOSE IN THE SAME YEAR UPON THE SAME PROPERTY OR ACTIVITY OF THE SAME PERSON 37. DUMPING DUTY -ADDITIONAL DUTY TAXES IMPOSED ON IMPORTED GOODS WITH PRICES LESSER THAN THEIR FMV TO PROTECT LOCAL INDUSTRIES 34. TAXES IN GENERAL ARE NOT CANCELLABLE 36. TAX IMPRESCRIPTIBILITY -UNLESS OTHERWISE PROVIDED BY THE TAX LAW ITSELF. TAX AVOIDANCE/TAX MINIMIZATION -REDUCING OR TOTALLY ESCAPING PAYMENT OF TAXES THROUGH LEGALLY PERMISSIBLE MEANS 39. COUNTERVAILING DUTY -IMPOSED TO OFFSET ANY FOREIGN SUBSIDY GRANTED TO IMPORTED GOODS TO THE PREJUDICE OF OUR LOCAL INDUSTRIES 32.MARKING DUTY -ADDITIONAL DUTY TAX GENERALLY IMPOSED ON IMPORTED ARTICLES AND/OR CONTAINERS WITH IMPPROPER CLASSIFICATION 33. TAX EVASION -UNLAWFUL MEANS TO LESSEN THE PAYMENT OF TAX 38. TAX OPTION -CHOICE TO PAY LOWER TAX RATES IN SOME TRANSACTIONS AS PERMITTED BY TAX LAWS 5 .-SPECIAL DUTY WHOSE PURPOSE IS TO OFFSET ANY FOREIGN DISCRIMINATION AGAINST OUT LOCAL COMMERCE 31. PROSPECTIBILITY OF TAX LAWS -A TAX BILL MUST ONLY BE APPLICABLE AND OPERATIVE AFTER BECOMING A LAW 35.

SHIFTING -TRANSFER OF TAX BURDEN TO ANOTHER 41. EXPRESSED OR IMPLIED. FRANCHISES OR SIMILAR LEGISLATIVE ACTS 44. TO A PARTICULAR PERSON. TREATIES. MAY BE ALLOWED AS PAYMENT FOR UNSETTLED TAX LIABILITIES IF BOTH TAXES ARISE FROM THE SAME TRANSACTION IN W/C OVERPAYMENT IS MADE AND UNDERPAYMENT IS DUE 47. EXEMPTION FROM TAXATION -GRANT OF IMMUNITY. EQUITABLE RECOUPMENT -A LAW DOCTRINE W/C STATES THAT A TAX CLAIM FOR REFUND.40. IMPLIED EXEMPTION OR BY OMISSION -WHEN TAX IS IMPOSED ON A CERTAIN CLASS OF PERSONS. CORPORATION. STATUTE. FROM A TAX UPON PROPERTY OR AN EXCISE W/C PERSONS AND CORPORATIONS GENERALLY W/IN THE SAME TAXING DISTRICT ARE OBLIGED TO PAY 43. CONTRACTUAL EXEMPTION -THOSE LAWFULLY ENTERED INTO BY THE GOV’T IN CONTRACTS UNDER EXISTING LAWS 46. TRANSFORMATION -THE PRODUCER ABSORBS THE PAYMENT OF TAX TO REDUCE PRICES AND TO MAINTAIN MARKET SHARE 42. ORDINANCES. THOSE NOT MENTIONED ARE DEEMED EXEMPTED 45. OR TO PERSONS OR CORPORATIONS OF A PARTICULAR CLASS. EXPRESSED EXEMPTION -EXEMPTIONS THAT ARE STATUTORY LAWS IN NATURE AS PROVIDED BY CONSTITUTION. DOCTRINE OF SET-OFF TAXES 6 . PROPERTIES OR TRANSACTIONS W/O MENTIONING OTHER CLASSES. W/C IS PREVENTED BY PRESCRIPTION.

CUSTOMS DUTIES -IMPOSITION ON IMPORTED GOODS TO PROTECT LOCAL INDUSTRY 54. MARGIN FEE -TAX ON FOREIGN EXCHANGE DESIGNED TO CURB THE EXCESSIVE DEMANDS ON OUR INT’L RESERVES 7 AND REGULATE . SUBSIDY -MONETARY AID DIRECTLY GRANTED OR GIVEN BY THE GOV’T TO AN INDIVIDUAL OR PRIVATE COMMERCIAL ENTERPRISES DEEMED BENEFICIAL TO THE PUBLIC 56. AS A PUNISHMENT FOR VIOLATIONS OF LAW OR ACTS DEEMED INJURIOUS 49. PENALTY -ANY SANCTION IMPOSED. DUTIES OR TAXES IMPOSED ON IMPORTED GOODS 55. TOLL -COMPENSATION FOR USE OF SOMEBODY ELSE’S PROPERTY DETERMINED BY THE COST OF THE IMPROVEMENT 52. LICENSE FEE -CONTRIBUTION BY THE GOV’T PRIMARILY TO RESTRAIN BUSINESS OR OCCUPATION 53. DEBT -AN OBLIGATION TO PAY OR RENDER SERVICE FOR A DEFINITE FUTURE PERIOD OF TIME BASED ON CONTRACT 51.-TAXES ARE NOT SUBJECT TO SET-OFF OR LEGAL COMPENSATION BECAUSE THE GOV’T AND THE TAXPAYER ARE NOT MUTUAL CREDITOR AND DEBTOR OF EACH OTHER 48. REVENUE -ALL FUNDS OR INCOME DERIVED BY THE GOV’T 50. TARIFF -SCHEDULE OR LIST OF RATES.

STATUTES -LAWS ENACTED AND ESTABLISHED BY THE WILL OF THE LEGISLATIVE DEPT. EXECUTIVE ORDERS -REGULATIONS ISSUED BY THE PRESIDENT OR SOME ADMINISTRATIVE AUTHORITY UNDER HIS DIRECTION FOR THE PURPOSE OF INTERPRETING.INTERNAL REVENUE TAXES -TAXES IMPOSED BY THE LEGISLATIVE BODY OTHER THAN CUSTOMS DUTIES ON IMPORTS 61.57. ESTATE. PRINCIPLE OF “PARI MATERIA” -TAX LAWS S/B INTERPRETED W/ REFERENCE TO OTHER TAX LEGISLATIONS AND THEIR EFFECT AS A WHOLE MAY BE GIVEN CONSIDERATION 62. W/C IS EMBODIED IN THE NIRC 60. GIFT. TAX TREATIES AND CONVENTIONS -INTERNATIONAL AGREEMENTS ENFORCEMENT AND EXEMPTIONS W/ FOREIGN COUNTRIES REGARDING TAX 8 . TAX LAW -BODY OF LAWS W/C CODIFIES ALL NATIONAL TAX LAWS INCLUDING INCOME. OF THE GOV’T 63. IMPLEMENTING. STAMP AND OTHER TAXES 59.INTERNAL REVENUE LAW -INCLUDES ALL LAWS LEGISLATED PERTAINING TO THE NAT’L GOV’T TAXES. OR GIVING ADMINISTRATIVE EFFECT TO A PROVISION OF THE CONSTITUTION OR SOME LAW OR TREATY 64. SPECIAL ASSESSMENT -AN AMOUNT COLLECTED BY THE GOV’T FOR THE PURPOSE OF REIMBURSING ITSELF FOR CERTAIN EXTENDED BENEFITS REGARDING CONSTRUCTION OF PUBLIC WORKS 58. EXCISE.

CITY.65.BIR RULINGS -EXPRESSED OFFICIAL INTERPRETATION OF THE TAX LAWS AS APPLIED TO SPECIFIC TRANSACTIONS 68. LOCAL TAX ORDINANCES -TAX ORDINANCES ISSUED BY THE PROVINCE.. JUDICIAL DECISIONS -DECISIONS FOR APPLICATION MADE CONCERNING TAX ISSUES BY THE PROPER COURTS EXERCISING JUDICIAL AUTHORITY OF COMPETENT JURISDICTION 69. MUNICIPALITY AND BARANGAY SUBJECT TO SUCH LIMITATIONS AS PROVIDED BY THE LG CODE AND REAL PROPERTY TAX CODE 9 .REVENUE REGULATIONS -RULES OR ORDERS HAVING FORCE OF LAW ISSUED BY EXECUTIVE AUTHORITY OF THE GOV’T TO ENSURE UNIFORM APPLICATION OF THE TAX LAW 66.REVENUE MEMORANDUM CIRCULARS -ADMINISTRATIVE RULINGS AND OPINIONS W/C ARE LESS GENERAL INTERPRETATIONS OF TAX LAWS BEING ISSUED FROM TIME TO TIME BY BIR COMMISSIONER OR BOC COMMISSIONER 67.

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