Chapter II

Review and Related Literature

This chapter provides the related literature and studies, theoretical framework, conceptual

framework, and the definition of terms. This facilitates of a problem and extending the

knowledge in the area under study.

Tax System

Any ordinary citizen commonly knows what tax is as it is constantly used in the public

and other published works. However, it is important to know from some related authors what this

concept means as to relay a fix perspective on this concept. According to A.V. Tolkushkin

(2000) it is a system that is charge to the state through a set of taxes and fees, the forms and

methods of its organization. Nazarov, V. N. (2016) summarizes the “tax system” logical term

could be a social category, which is considered an open framework that joins political, financial,

and lawful provisions, that is set up with a see in guaranteeing the execution of the tax, to imply

financial support for the movement of public territorial formations. It is defined also by by HM

Knoeller (1938), as a mode of raising revenue for public purposes. The power of taxation, in fact,

can be defined as the power inherent in the sovereign state to recover a contribution of money or

other assets under a reasonable rule of allocation of property or occupations within its

competence for the purpose of supporting public expenditure. In the Philippines, the system

covers national and local taxes wherein national taxes refers to national internal revenue taxes

imposed and collected by the national government through the Bureau of Internal Revenue (BIR)

and local taxes refer to those imposed and collected by the local government. The Republic Act
8424 discloses the powers and duties of the Bureau of Internal Revenue wherein this government

body shall comprehend the assessment and collection of all national internal revenue taxes, fees,

and charges, and the enforcement of all forfeitures, penalties, and fines in accordance therewith

and execute judgements in courts in all cases decided in its favor. Various taxes are imposed to

taxpayers. These are capital gains tax, documentary stamp tax, donor’s tax, estate tax, income

tax, percentage tax, value-added tax, withholding tax, and excise tax. (Republic Act No. 8424 AN

ACT AMENDING THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, AND FOR

OTHER PURPOSES. (1997, December 11); Guide to Philippines Tax Law Research. (n.d.);

B.I.R. (n.d.). Tax Information. BIR.Gov).