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    79 views14 pages

    Banggawan Chapter 2

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    Fely Maata

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    © All Rights Reserved
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    Chapier 2 - Taxes, Tax Laws and Tax Administraton ‘Sources of Taxation Laws 1. Constitution 2. Statutes and Presidential Decrees 3. Judicial Decisions or case laws 4. Executive Orders and Batas Pambansa 5S. Administrative issuances & Local Ordinances 7. Tax Treaties and conventions with foreign countries 8 Revenue Regulations ‘Types of Administrative Issuances Revenue regulatons 2. Revenue memorandum orders 3. Revenue memorandum rulings 4. Revenue memorandum orculars 5. Revenue bulletins 6 BIR rulings Revenue Regulations are issuances recommendation of the Commi prescribe, or define rules and ‘Memorandum Orders (RMOs) are ssuances that provide directives « ns; prescribe guidelines, and outline processes, operations, activities s, methods, and procedures necessary in the implementation of stated policies, goals, objectives, plans, and programs ofthe Bureau inal areas of operatans except auditing, ings, opinions and interpretatonsafiie Code and other tax laws as applied + specific set of facts, wi ed precedents, and which the CIRM issue from time to time for the purpose of providing taxpayers guidance onthe ns. BIR Rulings, therefore, cannot contravene di Revenue Memorandum Ri consequence: Issued RMRs, Revenue Memoranduay Circulars (RMCS) ave sssuances Ul applicable portions as well as amplifications of laws, rules regul issued by the BIR and other agenc'es/offices. ts publish pertinent Jations, and precede 36 chapter 2 - Taxes, Tax Laws and Tax Administration we Ballets (8) reer wo period asvances, not sition on certain specific sues of jaw or a ferent Cae cet aa te BSN Repub rons of the Bureau to queries raised by taxpayers and Tarification and interpretation of tax laws. sort of information service to the taxpayer such that the addressee and may be reversed by the BIR at posit skeholders relative 0 ly advisory is binding except to ‘Types of rulings 1, Value Added Tax (VAT) rulings 2. International Tax Affais 3, BIR rulings 4. Delegated Authority (DA) rulings 1 (TAD) rulings erally accepted accounting principles (GAAP) vs, Tax Laws SERETIN cepted acountng prineples oF GAAP are no laws, but are mere Traporting They ae benchmarks forthe fir and relevant jes and equity of 8 accountng epors ‘umber of user in the general ‘conventions of finan valuation and recognition of income, expense, asset for general purpose financial repo eet the common needs of a v ings prescribe the criteria for tax form of financial reporting which 1s intended to meet specific needs oftax authorities ‘Taxpayers normally follow GAAP in recording transactions in their books. However, in the preparation and filing of tax retums, taxpayers are mandated to follow the tax law in cases of conflict with GAAP. ‘They are effective even lemy occupation. They are laws of the occupied territory and. tnemy. Tax payments made during occupations of fora ‘enemies are valid. me ations of foreiga Cur tnternal revenue laws are not penal in nature because they do not define énme. Their penalty provisions are merely int se merely intended to secure taxpayers’ 37 eT Chapter 2 - Taxes, Tax Laws and Tax Administration TAK aes an enored proportonal et Sutetoraerevnteforpbeprpse, ns” EMMMANINE ty Blements ofa Valid Tax ‘Tax must be levied by the taxing power havi Ee y 1 po ig jurisdiction over the object po ‘Taxis generally payable in money. Gassification of Taxes ‘A Asto purpose 1, Fiscal or revenue tax ~ 2 tax imposed for general purpose 2. Regulatory ~ a tax imposed to regulate business, conduct, acts or transactions 3. Sumpruary~ a tax levied to achieve some socal or economic objectives B. Asto subject matter 1. Personal, poll or capitation ~ a tax on persons who are residents of a particular territory 2. Property tax ~ a tax on properties, real or personal 3. Excise or privilege tax - a tax imposed upon the performance of an a, ‘enjoyment ofa privilege ar engagement in an occupation © Astoincidence 1. Direct cax ~ When both the impact and incidence of taxation rest upon the same taxpayer, the taxis said to be direct. The tax iscolected from the person who 1s intended to pay the same. The statutory taxpayer is the ‘economic taxpayer. 2. Indirect tox ~ When the taxis pa fs intended to pay the same, the ta the case of business taxes where ‘economic taxpayer. ‘The statutory taxpayer isthe person named by law to pay the ax At economic taxpayer isthe one who actually pays the tax. D. Astoamount 1. Specific ax ~ a tax ofa fixed amount imposed on a per uni bass such a per kilo, ter or meter, te ay person other than the one whe be indirect. This occurs in tory taxpayer Is not the 8 apter2- Tasos, Tax Laws and Tax Adminisiaton 4. Ad valorem -atax of 2 fixed proportion imposed object £ Astorate 4) Proportional tax ~ 7 tax emphasizes €9 eon eon Ttestx whch imposesneremn a re eee The tse of Pomrssive rae, TANG 3 at ease because i ges more tanto those who are cana ung he ga between the ch andthe POT 4 foprne tot This tan pes decreasing 2x rates a6 the tx base re Te at reverse of progressive tax, Regressive (aX ( an ra lirectly violates the Constitutional guarantee of pon the value of the tax tax, The use of proportional payers with the same rate manifest tax rates which is2 combination of any of the above types of tax. B, Astoimposing authority 1 Nanana var tax imposed by the national government Examples 2 Income ex tax on annual income. gains or profits i Eoete or tx on gratuitous transfer of properties by a decedent upon death Donor’ tx taxon gratutous transfer of properties by ving donor Value Added Tox = consumption tax collected by VAT business taxpayers © Other percentage tax ~ consumption tax collected by non-VAT usiness taxpayers ssential commodities such inerals. This should be } tax on documents agreements an papers evidencing the accep transfer of an obli _ m 2 Lect a-axis by the municipal ea government amp 39 (Chapter 2 - Taxes, Tax Laws and Tax Adminstration 4. Community tax © Tax on banks and other financial institutions DISTINCTION OF TAXES WITH SIMILAR ITEMS Taxvs Revenue Tax refers tothe amount amount imposed by the goverament for public purpose refers to all income collections ef the government whith ince aa weet licenses, toll, penalties and others. The amount leases, lies and others. The amount imposed ts tax but the amount Tax v5 License fee Tax has a broader subject than license. Tax emanates from taxa imposed upon at ject such as persons, proy piles ae Imposed upon any objet such a persons properties, or prilges to ase License fee emanates from peice power and is imposed to regulate the exercise of 2 privilege sucha the commencement ofa business oa provesaon Taxes are imposed after the commencement ofa business or profession where hens fe s imposed before engagement In those activites. In other words tax a post-actvy imposizon whereas license preactiiyimpositon Taxvs. Toll ‘Tax is a levy of government; hence, isa demand of sveregay. Tl isa cha for the use of other's property; hence, 2 = isa demand of ownership. ‘The amount of tax depends upon the needs of the government, but the amount ef toll is dependent upon the value of the property leased. Both the government and private entities impose tol, but private entities cannot impose taxes. Tax vs. Debt “Tax arises from law while debt arises from private contracts. Non-payment of tx Jeads to imprisonment, but non-payment of debt does not lead to imprisonment. Debt can be subject to set-off but tax is not. Debt can be paid in kind (dacion en pogo) but tax is generally payable in money. ‘Tax draws interest only when the taxpayer is delinquent. Debt draws interest 'ss0 stipulated by the contracting parties or when the debtor incurs a lay ‘chapter 2- Taxes, Tax Laws and Tax Administrator Speci sessment a exw spect Assesment eran, properties, ar privilege. Special ee lands adjacent to a public ont ened by the. government. on poli assesment ee posed on land only and vs intended to compensate th eroment he cost of the mprowerent. of spec sessment i the benefit in urms of he appreciation ee ee rrovemet Ont oer hd (as vied without ln ofadretproximatebeneft sessment attaches tothe land, It will nat become a personal ssessment land ass ind owner Therefore, the non-payment of speci Imprisonment ofthe owner (ualike in non-paymer Taxvs. Tacit ‘Tax i broader than tariff. Tax is an amount imposed upon persons, privilege, transactions, o properties. Tariffs the amount imposed on imported or exported commodities ‘Taxvs. Penalty Tar is an amount imposed for the support of the government. Pen: mount imposed to discourage an act Penalty may be imposed by bo {government and private individuals. It may arise both from law or contract ‘whereas tax arises from law. ‘TAX SYSTEM ‘The eax stem refers to the methods or schemes of imposing, assessing, and collecting taxes, Ie includes a laws and regi and the government offices. bureau rament in ta ‘The Philippine tax ax system and the local tax system, ‘Types of Tax Systems According to Imposition 1 Progressive ~ em jon of income of individuals, and transfers 3. Regressive ~ not emp i fone that emphasizes di encourages economic 1 to be efficient. This ty ‘tx system impacts, ‘more upon the rich a stration cnaptor2 Teves, Taxtaws end Tax Admini sone that emphasizes indirect t2Xe8, Indie. A repress pucnenses to consumers hence the iMPACT Of tation pt see rere ante sone ce that despite the Constitutional guarantee ofa p res has a dominantly regressive tax system Teg te ty pexcousenon SEs ‘The creditable withholding tax is intended to support the self-assessment method to lessen the burden of lump sum tax payment of taxpayer and also provides for a possible third-party check for the BIR of non-compliat taxpayers. 2. Final withholding tax - a system of tax collection wherein payors ax required to deduct the full ax on certain income payments ‘The final withholding tax is intended for the collection of taxes fem income with high risk of non-compliance. ‘Similarities of Onl tax and creditable withholding tax ‘ rncome payor withholds a fraction ofthe income and rem the government. 1 By collecting at the moment cash 1s aval flow problems tothe taxpayer and ccl both serve to minimize = Jems to the government. Chapter 2 - Taxes, Tax Laws and Tax Administration Differences between FWT and CWT inal with taing [Grea “income tax withheld | 4 Coverage of Geran passive income | Gunning fn Who remis the actual” | —Tnvomne payor | Taeome payor for the CWT and ax cs eT _| the anpayer for tne balance ‘ecessig/of income tax | Wot required Required return fortaspayer | . B. Withholding system on business tax - when the national government agencies and instrumentalities including government-owned and controlled corporations (GOCCs) purchase goods oF services from private suppliers, the Jaw requires withholding of the relevant business tax (Le. VAT or percentage tax) Business taxation is discussed under Business and Transfer Toxation by ‘the same author. Voluntary compliance system - Under this collection system, the taxpayer himself determines bis income, reports the same through income tax returns ‘and pays the tax to the government. This system is also referred to as the *Self-assessment method” ‘The tax due determined under this system will be reduced by: a, Withholding tax on compensation withheld by employers . Expanded withholding taxes withheld by suppliers of goods or services ‘The taxpayer shall pay to the government any tax balance after such credit or claim refund or tax eredit for excessive tax withheld. D. Assessment or enforcement system ~ Under this ci jovernment identifies non-compliant taxpayers, assesses their tax dues penalties, demands for taxpayer's voluntary compliance or enforces lections by coercive means such as summary proceeding or judicial proceedings when necessary. jon system, the PRINCIPLES OF A SOUND TAX SYSTEM According to Adam Smith, governments should adhere to the following principles ns to evolve a sound tax system: 3. Administrative feastbility 2 Chapter 2 - Taxes, Tax Laws and Tax Administration Fiscal ade TTY guices that the sources of government funds must be s al adequacy Fea) to cover government costs The government must Ot INEUF & deft A hye defen paralyzes the government's abit to deliver the essential pubic serve the people. Hence, taxes should increase in response f0 increase in goverpgs spending, Theoretical justice Theorvtcel justice or equity suggests that taxation should consider the taxpayer Prone et ease tht he everaef 20U0N shold ae ‘oppressive, unjust, or confiscatory. Administrative feasibility ‘Administrovve feasibility suggests that tax laws should be capable of efficient ang effective administration to encourage compliance. Government should make i, easy for the taxpayer to comply by avoiding administrative bottlenecks ang reducing compliance costs ving are applications of the principle of administrative feasibility ind e-payment of taxes ing system for employees holding tax on non-resident aliens or corporations 4. Accreditation of authorized agent banks inthe filing and payment of taxes TAX ADMINISTRATION Tax administration refers to the management of the tax system, Tar administration of the national tax system in the Philippines is entrusted to the Bureau of Internal Revenue which is under the supervision and administration of ‘the Department of Finance. Chief oficials of the Bureau of Internal Revenue 4. 1 Commissioner 2. 4 Deputy Commissioners, each to be designated a. Operations group b. Legal Enforcement group Systems Group danagement Group ‘POWERS OF THE BUREAU OF INTERNAL REVENUE 1. Assessment and collection of taxes 2. Enforcement of al forfeitures, penalties and fines, and judgments in all cases decided in its favor by the coures he following: “4 Chapter 2 - Taxes, Tax Laws and Tax Administration the supervisory and pohee powers ue officers and other employees to other dt ution of forms, receipts, certificates, stamps, etc, (0 is and clearances ‘Submission of annual report, pertinent ‘the Congressional Oversight POWERS OF THE COMMISSIONER OF INTERNAL REVENUE the NIRC, subject to review by the Secretary of sss and reports to fe jurisdiction of the Court bb, Refunds of internal revenue taxes, fees, or other charges Penalties imposed d. Other NIRC and special law matters administered by the BIR. To obtatn information and to summon, examine, and take testimony of persons to effect tax collection Purpose: For the CIR to ascertain: ‘a, The correctness of any tax return or in making a return when none has the taxpayer ty of any person for any internal revenue tax or in correcting, Authorized acts a. Toexamine any book, paper, record or other data relevant to such inquiry b. To obtain on a regular basis any infor ‘om any person other than the person whose ty is subject to aud «To summon the person lable for tax or required to file a return, his employees, or any person having possession and custody of his books of rds to produce such books, papers, records yerson concerned, under oath, as may be wiry ‘employees to make canvass of any revenue distret uke assessment and prescribe ade jon and enforcement ional requirement for tax 4s ‘Chapter 2 - Taxes, Tax Laws and Tax Administration §. Toexamine tax returns and determine tax due thereon, ‘The CIR or his duly authorized represer of any taxpayer and the assessment ofthe cor ‘a return shall not prevent the| ‘Tac or deficiency assessments are due upon notice and demand by the cg his representatives. * the examination, panne sstenons of deratns shal tb resis nels tend Sty coo vn teuee Be at or retbgen eae When arts nat be frteomig within the greeted ded west Sk mp nese pope sm th bro a yom eon ey fee mea In case a person fails to file a required retum or other documents atthe tine prescribed by law or willfully files a false or fraudulent return or other documents, the CIR shall make or amend the return from his own knowledge and from such information obtained from testimony. The return shall be ‘presumed prima facie correct and sufficient for all legal purposes. ‘To conduct inventory taking or surveillance To prescribe presi 1 receipts for a taxpayer when: ssue receipts: or the books or other records of the taxpayer do net gross sales 0 shall be derived from the performance F business under similar circumstances adjusted for other relevant tax period when the taxpayer is: 1g from business mye property The wemiston ofthe nal pened shal be commnicated trough tt Serene eee rah rove le kamediee paseo: Tuan bab, 45 ‘Chapter 2 - Taxes, Tax Laws and Tax Administration 9. To prescribe real property values ‘The CIR is authorized to property values after consul prescribed are referred to as zonal value. For purposes of internal revenue taxes, fair value of real property shall mean whichever is higher of 4. Zonal value prescribed by the Commissioner . Faic-macket value 2 shown in the schedule of market values of the Provincial and City Assessor’ Office “The NIRC previously used the assessed vai fair market value, Assessed value is th taxation, The value to use now is the full fair Philippines into zones and presenbe real ‘competent appraisers. The values which is merely a fraction of the ‘of the real property tax in local iue of the property 10. To compromise tax abilities of taxpayers ying instances: 11, To inquire into bank deposits, only under the ion of the gross estate of a det . To substantiate the taxpayer's claim of financial incapacity to pay tax in an application for tax compromise inquiry can proceed only if the taxpayer k Deposit Secrecy Act 12, To accredit and reg ‘The denial by the for accreditation is appealable to the Department of Finance. The lailure of the Secretary of Finance to act on the appeal within 60 days is deemed an approval eral revenue taxes 13, To refund or credit 114, To abate or cancel tax abilities in certain cases 15. To prescribe additional procedures or documentary requirements 16, To delegate his powers to any subordinate officer with a rank equivalent to a division chief of an ofice Non-delegated power ofthe CIR ‘The fllowing powers ofthe Coromissioner shal nat be delegated: 1. The power to recommend the promtigaton of roles and regulations to the Secretary of inane 2. The power to istue rulings of first mpression orto reverse, revoke or madly any existing clings ofthe Bureau. a Chapter 2 - Taxes, Tax Laws and Tax Administration 3. The power to compromise or abate any tax tabihty the Regional Evaluation Boards may compromise tax labiteg wing ts are issued by the regional offices involving basie defc ‘ax of P500,000 oF less, and ciency mms discovered by regional and district officials, Composition of che Regional Evaluation Board a. Regional Director as chairman b. Assistant Regional Director Heads ofthe Legal, Assessment and Collection Divi dd. Revenue District Officer having jurisdiction over the taxpayer 4. The power to assign and reassign internal revenue officers to establishments where articles subject co excise tax are produced or kept. Rules in assignments of revenue officers to other duties 1. Revenue officers assigned to an establishment where excisable articles are kept shall m no case stay there for more than 2 years. 2. Revenue officers assigned to perform assessment and collection function shall not remain in the same assignment for more than 3 years. 3. Assignment of internal revenue officers and employees of the Bureau to special duties shall not exceed 1 year. ‘Agents and Deputies for Collection of National Internal Revenue Taxes ‘The following are constituted agents for the collection of internal revenue taxes: |. The Commissioner of Customs and his subordinates with respect to collection ‘of national internal revenue taxes on imported goods. 2. ‘The head of appropriate government offices and his subordinates with respect to the collection of energy tax. 3, Banks duly accredited by the Commissioner with respect to receipts of payments of internal revenue taxes authorized to be made thru banks, These are referred to as authorized government depositary banks (AGDB). OTHER AGENCIES TASKED WITH TAX COLLECTIONS OR TAX INCENTIVES RELATED FUNCTIONS 1. Bureau of Customs 2. Board of investments 3. Philippine Econonuc Zone Authonty 4. Local Government Tax Collecting Unit 48 (Chapter 2 - Taxes, Tax Laws and Tax Administraton Bureau of Customs (BOC) ions, the bureau of Customs is tasked to administer tanfls on imported ‘and collection of the Value Added Tax on on. Together with the BIR, the BOC is under the supervision of the Department of Finance. ‘commissioner and is assisted by The Bureau 1s 1s headed by the Cu: five Deputy Commissioners and 34 District ard of Investments (BOM) tasked to lead the promotion of investments in the Philippines by 105 and foreign investors to venture and prosper in desirable areas supervises the grant of ax mncentives under the Onintbus Investment Code. The BOI is an attached agency of the Department of Trade and Industry (DTH) ‘The BOI is composed of five ful jovernors, excluding the DTI secretary as tts chairman. The President ‘a vice chairman of the ‘board who shall act as th Philippine Economte Zone Authority (PEZA) ‘The PEZA 1s created to promote investments in export-oriented manufacturing industries inthe Philippines and, among other mynads of functions, supervise the grant of both fiscal and non-fiscal incentives. PEZA registered enterprises enjoy tax holidays for certain years, exemption from Import and export taxes including local taxes. The PEZA ts also an attached agency of the DTI. The PEZA is headed by a director general and is assisted by three deputy directors. Local Government Tax Collecting Units Provinces, municipalities, cities and barangeys also imposed and collect various taxes to rationalize thetr fiscal autonomy. ax treatments of BOL-registered or PEZA-registered enterprises 1e local taxes imposed by ocal governments will be discussed under Local & Preferential Taxation by the same author. CChepter 2 - Taxes, Tax Laws and Tax Administration ‘TAXPAYER CLASSIFICATION FOR PURPOSES OF TAX ADMINISTRATION For purposes of effective and efficent tax administration, taxpayers are classgeg into: 1 Large taxpayers - under the supervision of the Large Taxpayer Service (ins of the BIR National Office. 2. Non-lerge taxpayers ~ under the supervision of the respective Revenue District Offices (RDOs) where the business, trade or profession of the taxpayer is situated Criteria for Large Taxpayers: A. Asto payment Value Added Tax - Atleast P200,000 per quarter forthe preceding year 2. Excise Tax - At Yeast 1,000,000 tax paid for the preceding year 3. Income Tax - At least P1.000,000 annwal income tax paid for the preceding 44. Withholding Tax - At least P1,000,000 annual withholding tax payment or remittances from al types of withholding taxes 5, Percentage tax - At least P200,000 percentage tax paid or payable per quarter for the preceding year 6. Documentary stamp tax At least P1,000,000 aggregate amount per year B. Asto financial conditions and results of operations 1. Gross receipts or sales -P1,000,000,000 total annual gross sales or receipts 2. Net worth - 300,000,000 total net worth at the close of each calendar or fiscal year 3. Gross purchases - P800,000,000 total annual purchases for the preceding year 4. Top corporate taxpayer listed and published by the Securities and Exchange Commission ‘Automatic classification of taxpayers as large taxpayers. ‘The foliowing taxpayers shall be automatically classified as large taxpayers upon notice in writing by the CIR: 1, All branches of taxpayers under the Large Taxpayer's Service 2. Subsidiaries, affiliates, and entities of conglomerates or group of companies of & large taxpayer 3. Surviving company in case of merger or “onsolidation of a large taxpayer 4. A corporation that absorbs the operation or business in case of spin-off of 20y large taxpayer 5. Corporation with an authorized capitalization of at least P300,000,000 registered swath the SEC Chapter 2- Taxes, Tax Laws and Tax Admnistration ital of .es with an authorized capitalization oF assigned caps ign banks (the reg bbe considered one taxpayer east P100.000,000 authored capital in banking. yramunication, utilities, petroleum, tobacco, and alcohol industries syers engaged in the production of metallic minerals st (Chapter 2 - Taxes, Tax Laws and Tax Administration (CHAPTER 2: SELF-TEST EXERCISES Discussion Questions 1, Distinguish taxlaw from 2. Enumerate the sources of 3. Discuss the nature of 4. Distinguish tax laws, revenue regul 5. 6 2 exemption law. Define eax and identify ts elements. What are the classifications of taxes? Enumerate and provide examples dlassification. Pie Gre Compare tax with revenue, license, toll, debt, special assessment, tai penalty at What tax system? What are ts types? Enumerate the principles of a sound tx system. Explain each, 410. Enumerate the powers ofthe BIR. 44, Enumerate the non-delegated powers ofthe CIR Chapter 2- Taxes, Tax Laws and Tax Administration (0.3 teria fr the selection of large taxpayer foreach ofthe following: ‘Astopayment. | eriteria | Exercise Drill No. CH, Value Added Tax — Identify the typeof tax that s described by the following: 2. Excise Tax a 3. Income Ta, 1A consumption tax collected by non-VAT busi : iding Tax : 2. Tax on gratuitous transfer of property by a 3. Percentage Tax ee ‘3. Tax that decreases in rates asthe amount or value a the Documentary Stamp Tae sax objectincreases [Asto condi — Tx taxpayers fed upon persons who are not the statutory ‘Tax that is imposed based on the vale of the tax objec “Tax for general purpose Tax imposed by the national government ‘Atax on sin products or non-essential commodities imposed on the ransfer of property upon death 10, Tax on residents 0 residents 0 my LL, Tax that remains at flat rate regardless ofthe value ofthe 52 ‘Multiple Choice - Theory: Part 1 1. When taxis collected upon someone who is effectively reimbursed by another, the taxis regarded as «, personal 4 itegal. ralorem taxes, except one. Select the exception. «Real property tax ‘Capital gains tax on real property capital asset 3, Taxation power can be used to destroy a asarevenue measure. c.as an implement of police power. 1. evenifthe tax sinvalid, d. when the State isin dire need of funds. 4. Which ts nota characteristic of tax? 4. tis an enforced contribution. b._ Its generally payable in money. 53 chapter 2 - Taxes, Tax Laws and Tax Administration c Itis subject to assignment. §._ttislevied by the law-making body of the State having lurisdiction, 5. Which of the following {sa local tax? a Value added tax vumentary stamp tax Real property tax er percentage taxes 6. Which isnot a source of tax a. CHED regulations, chal decisions BIR Rulings Constitution 2, Taxas to purpose is classified as a Fiscalor regul «National or local tax b._Direct or indi 4 Specific or ad valorem tax 1. Taxasto incidence is classified as a ‘regulatory ¢-National or local tax 9, Taxasto source is classified as ‘National oF local tax 4 Specific or ad valorem tax 10. Which isnot anature oftax? ‘4. Enforced proportional contribution 'b._ Enforced withia the teritoral jurisdiction ofthe taxing authority _Levied by the lawmaking body Generally payable n kind 1, Taxes that cannot be shifted by the statutory taxpayer are referred to as. a direct taxes, c business taxes. ‘indirect taxes. 4 personal taxes. 12, Which is alocal tax? a Donor's tax Documentary stamp tax b. Professional tax Excise tax 13, Asto subject matter, taxes do not include 2. Property tax Poll tax Regulatory tax d. Excise tax 14, A tax that is imposed upon the performance of an act, the enjoyment ofa privet ‘or the engagement ina profession s known as 2 incometax. bi license. ‘Chapter 2 - Taxes, Tax Laws and Tax Administration sonal tax local tax 22, Which is not am excise tax? 2. Incometax Community tax 18 from tax? renders business illegal wity sn applicanon ‘combination of an ad valorem tax and specific tax. sxample of aregulatory tax. ¢ Bstate tax Occupation tax 35 ‘Taxes, Tax Laws and Tax Administration indirect tax? Income tax 4. Real property tax Income tax & Proportional tax «-Ad valorem tax 1B Specific tax 4 Progressive tax 26, Taxasto rates excludes Specific tax Mixed x 4, Proportional tax is obligations to B under the contract. ‘ean no longer run after Mr. A because he the Philippine territory. The government should wait until Mr. Becomes solvent again, 4. The government should force Mr. A to pay because taxes are non-assignable, tax laws are, by nature, al political and dvi 4. penal and civil. 29. Motor vehicles taxis an example of a Property tax b. Privilege tax € Income tax Indirect tax the constitution, by the president errors of public officials should bind the abuse. ‘Chapter 2 - Taxes, Tax Laws and Tax Administration Court of Tax Appeals <4. Commissioner of internal Revenue ced in application? Tax treaties 6. BIR Ruling of tax law? ‘¢ Opinions of tax experts 4. Tax treaties and ordinances 34, Which issues revenue regulations? a. Department of Finance . Commissioner of internal Revenue b. Congress <.Commissioner of Customs 35. Which is not an element of tax? © 4. Itrwust be uniform and equitable. 36, Tax as to purpose does not int a Revenue’ BL Sumptuary 37, When the impact and incidence of taxation are merged into the statutory taxpayer, the tax is known as a Personal tax Direct tax « Indirect ax National wx 38, Tax as to objectincludes a. Personal tax Excise tax b. Property tax 4.Allofthese 39, Which is not an indirect tax? a Dues Excise tax b. Impost Personal tax 40. Atax that cannot be avoided is a tax Specific tax ct tax Personal tax 37 Chapter 2 - Taxes, Tax Laws and Tax Administration b. Only statement 2 is correct. €. Both statements are correct. 4d. Neither statement is correct. 42, Which isan indirect tax? Other percentage tax _¢. Donor's tax b. Income tax Estate tax 43, Income tax isnot a/an a. Advalorem tax « Revenuetax b. Direct tax 4. Property tax 44, Atransfer taxis not a/an a Regressive tax «National tax b. Advalorem tar d.Exeisetax 45, Which ofthe following levy is fiscal or revenue by nature? fared to phase out a deficit balance of the government. ‘gambling in the Philippines. € Taxlaw intended to prot 4. Tax law supporting the development of a particular industry Multiple Choice - Theory: Part 1, Which isnot an excise tax? a. Income tax b. Business tax Personal tax Transfer tax 4. Intended for public purpose 3, A levy from a property which derives some special benefit from putit improvement is a Specialassessment «Taxation b. Eminent domain atoll 4. A.Government revenue may come From tax, license, toll and penalties. B. Penalty may arise ether from law or contracts. Which i false? a Aonly cAandB & Bonly .Neither A nor B 58 Chapter 2 - Taxes, Tax Laws and Tax Administration 5. What distinguishes tax from license? a Taxisa regulatory measure. G. Tacisa post acavity imposition he following distinguishes license from tax? 7. Theamount imposed is based on the value of the property a Eminentdomain Toll License 4. Special assessment 18, Which is intended to regulate conduct? a Penalty «Police power b. License Toll ‘9, Toll exhibits all of the following characteristics, except one. Which is the exception? 2 Demand of ownership 5. Compensation forthe use of another’ property Maybe imposed by private individuals 44._Levied forthe supporto the government 10. Which ofthe following isincorrect? 2. The collected tax is referred to 25 revenue, . Taxi the sole source of government revenue, Tensei imposed before commencement of a business or profession. 42. Debt can be subject to compensation or set off 11, Debe as compared to tax ‘ademand of ownership. imprisonment when not pald. rayable in money. ‘ofthe persoa owning the property on building and other real right attaching Chapter 2 - Taxes, Tax Laws and Tax Administration 13, Tax asto subject matter does not include a. Real propertytax «Excise tax bb. Personal tax dd. Regulatory tax 14. What distinguishes debt from tax? ‘2 Atises from contract. c.Non-payment will lead to imprisons BL Never draws interest d. Generally payable in money ™™ Multiple Choice - Theory: Part 3 1. The Commissioner of internal Revenue is not authorized to a. interpret the provisions ofthe National Internal Revenue Code promulgate Revenue Regulations. terminate an accounting period. 4d. prescribe presumptive gross receipts. 2. Which is not a power of the Commissioner of Internal Revenue? a. To change tax periods of taxpayers . Torefund internal revenue taxes ¢ To prescribe assessed value of real properties 4. To inquire into bank deposits only under certain cases 3. Theprinciples ofa sound tax system exclude a, Economic efficiency. Theoretical justice b. Fiscal adequacy

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