Taxation
60. Essential Elements of a Tax
a. Enforced contribution
b. Generally payable in money
c. Proportionate In character
d. Levied on persons, property, or exercise
of right or privilege
e. Levied by the state which has
jurisdiction over the subject or object of
taxation
f. Levied by lawmaking body of the state
g. Levied for public purpose
Classification of taxes as to Subject Matter
62. Personal, Poll, or Capitation Tax
It refers to tax of a fixed amount imposed on
individuals, whether citizens or not, residing within
a specified territory without regard to their property
or the occupation in which they may be engaged
(e.g., community tax).
63. Property Tax
It refers to 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 estate tax).
64. Excise Tax
It refers to tax imposed upon the
performance of an act, the enjoyment of a privilege
or the engaging in an occupation (e.g., estate tax,
donor’s tax, income tax, value added tax).
Classification of Taxes as to Who Bears the Burden
66. Direct Tax
It refers to tax demanded from person who
are intended or bound by law to pay the tax (e.g.,
community tax, income tax, estate tax, donor’s tax).
67. Indirect Tax
It refers to tax which the taxpayer can shift
the burden to another (e.g., customs duties, value-
added tax, some percentage taxes).
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Classification of Taxes as to Determination of
Amount
69. Specific Tax
It refers to tax imposed based on a physical
unit of measurement, as by head or number, weight,
length, or volume (e.g., tax on distilled spirits,
fermented liquors, cigars, wines, fireworks, etc.).
70. Ad Valorem Tax
It refers to tax of a fixed proportion of the
value of property; it needs an independent appraiser
to determine its value (e.g., real estate tax, certain
customs duties).
Classification of Taxes as to Purpose
72. General, Fiscal, or Revenue Tax
It refers to tax with no particular purpose or
objects for which the revenue is raised, but is simply
raised for whatever need may arise (e.g., income
tax, value added tax).
73. Special or Regulatory Tax
It refers to tax imposed for a special purpose
regardless of whether revenue is raised or not, and
is intended to achieve some social or economic end
(e.g., protective tariffs or customs duties on certain
imported goods to protect local industries against
foreign competition).
Classification of Taxes as to Authority Imposing
the Tax or Scope
74. National Tax
It refers to tax imposed by the national
government (e.g., internal revenue taxes, tariff and
customs duties).
75. Municipal or Local Tax
It refers to tax imposed by municipal
governments for specific needs (e.g., real estate
taxes, municipal licenses).
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Taxation
Classification of Taxes as to Graduation or Rate
77. Proportional Tax
It refers to tax based on a fixed percentage
of the amount of property income or other basis to
be taxed (e.g., percentage taxes, real estate taxes).
78. Progressive or Graduated Tax
It refers to tax whose rate increases as the
tax base increases (e.g., income tax).
79. Regressive Tax
It refers to tax whose rate decreases as the
tax base increases.
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80. Toll
a. It is a sum of money for the use of
another’s property.
b. It is a demand of proprietorship.
c. It may be imposed by the government or
private individuals or entities.
81. Penalty
a. It is any sanction imposed as a
punishment for violation of law or acts
deemed injurious.
b. Violation of tax laws may give rise to
imposition of penalty.
c. It is designed to regulate conduct and
may be imposed by the government or
private individuals or entities.
82. Special Assessment
a. It is an enforced proportional
contribution from owners of lands for
special benefits resulting from public
improvements.
b. It is levied only on land.
c. It is not a personal liability of the person
assessed.
d. It is based wholly on benefits and is
exceptional both as to time and place.
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83. Permit or License Fee
a. It is a charge imposed under the police
power for purposes of regulation.
b. Failure to pay a license fee makes an act
or a business illegal while failure to pay
a tax does not necessarily make an act
or a business illegal.
84. Debt
a. It is generally based on contract, is
assignable, and may be paid in kind.
b. A person cannot be imprisoned for non-
payment of debt while he can be for non-
payment of tax (except poll tax).
85. Customs Duties
These are taxes imposed on goods exported
from or imported to a country.
86. Regressive System
It is a tax system that introduces more
indirect taxes rather than direct taxes.
87. Progressive System
It is a tax system that introduces more direct
taxes rather than indirect taxes.
88. Double Taxation
It is not unconstitutional but is being
discouraged.
89. Direct Duplicate Taxation
It is the taxing twice:
a. of the same object
b. by the same taxing authority
c. under the same jurisdiction
d. for the same purpose
e. during the same period.
90. Indirect Duplicate Taxation
It is a type of double taxation other than
direct duplicate taxation (i.e., one or more of the
characteristics of direct duplicate taxation is not
met). Example: Corporate income tax and passive
income tax on dividends received by shareholders.