• Personal, poll or capitation Basic Taxation - fixed amount taxes imposed on people residing in a The Concept of Taxation, its Importance, Principles, and specified territory without regard to properties or Classifications earnings. • Property General Principles - taxes imposed on real and personal property. • Tax – enforced proportional contributions from • Excise persons and property levied by the state for the support - tax imposed on consumption and engagement in the of its public needs. practice of a profession • Taxation – a rate by which government makes As to purpose exactions for revenue in order to support its existence and carry out legitimate purpose for general welfare. • General, fiscal or revenue. • The Importance of taxation derives from the • Special or regulatory unavoidable obligation of the government to protect the As to scope people and extend them benefits in the form of public • National projects and services. • Municipal or Local • In exchange, persons are subjected to the reciprocal duty of sharing the expenses to be incurred therefore As to determination of account through the payment of tax. • Specific Similarities - Taxes imposed no specific amounts on a specific • Inherent and need no express constitutional grant. standard of measurement. • Not just necessary but indispensable • Ad valorem • Modes by which the state interferes with private rights. - this is a tax which is added into the assessed value of a • They presupposes equivalent compensation though not taxable entity. necessarily determined in pecuniary. As to graduation or rate • Exercised primarily by the legislative department or law • Proportional makers. - taxes that are computed as a fixed proportion of the • Intended only for the general welfare and public value of an entity being taxed in the rate of consumption. purpose. • Progressive - those are taken whose rates increase as the entity Three Inherent Powers of the STATE being taxes also increases. • POLICE - The power to control everything for general • Regressive welfare - opposite of progressive. Lawful means and Lawful subject *Salus populi est suprema lex Kinds of Taxes **Sic utere tuo ut alienum non laedas • Income Tax - these earnings are taxed by the national • EMINENT DOMAIN - The power to expropriate government and are progressive properties for public use for Just compensation in nature. • Donor’s Tax - the act of a certain person in disposing • TAXATION - The power to demand contributions from without consideration of money or giving certain thing in anyone enjoying its protection and benefits favor of another who accepts it. *Life-blood Theory • Estate Tax - tax imposed on the right of a deceased *Equal, Uniform and Equitable person to transfer the estate to his lawful heir or *Public purpose beneficiary. Taxation - the power to demand from the members of • Value Added Tax - tax imposed on the sale and/or the society of their proportionate share or contribution in exchange of goods and services. the maintenance of the state as a whole; it is also the act • Excise Tax - tax imposed on specific goods produced in of imposing and collecting a tax. the Philippines for local consumption. Other Percentage Taxes Characteristics of Taxes: • Documentary Stamp Tax - tax on legal documents and • Taxes are enforced contribution. papers. • Taxes are generally payable in money. • Customs duties and tariffs - customs duties are taxes • Taxes are imposed on persons or property. imposed on the importation and exportation of goods in • Taxes are levied by the national and local government. and out of the country. • It takes a congressional act to put up taxes. • Travel Tax - tax imposed on travel whether local or • Taxes are imposed solely for public purposes. foreign. • Energy Tax - tax imposed on the use of petroleum products. • Private motor vehicle tax - tax imposed on the owners of private motor vehicles. Other terms • Tax Levying - act of putting up taxes on persons, activities and products. • Tax Assessment - is the official action of an officer duty authorized by law in determining the amount of tax due. • Tax Collection - process of getting the taxes imposed by the proper government agencies. • Tax Avoidance - the use by a taxpayer of legally and permissible means or methods in order to avoid or reduce tax liability. It is not punishable by law. • Tax Evasion - is the use by a taxpayer of illegal or fraudulent means to defeat or reduce the payment of a tax; it is punishable by law. Limitation on the Power of Taxation • Principle of due process of land. • Rule of Uniformity • Equal protection of the laws. • Nobody can be imprisoned for non – payment of a poll tax. • No taxes shall be imposed which would impair religious freedom. • No appropriation or use for religious purpose can be done. • Religious, charitable, educational entities, non-profit cemeteries and churches are exempted from taxes. • Non-stock, Non-profit educational or other institutions are exempted from paying taxes. • Tax exemption cannot be done outright. • The President has the authority to veto a particular item or items in a revenue or tariff bill. • Taxes cases in all levels of the courts will be under the final jurisdiction of the Supreme Court. Common administrative approaches which allow the government to collect taxes • Seizure by the government of personal property to enforce the payment of taxes. • Levy of real property. • Enforcement of forfeiture • Entering into a compromise tax liability • Filing of bonds. • For the late payments and delinquent taxpayers, surcharge and interest can be imposed. • Giving of rewards to informers. • Certain officers of BIR are allowed to make arrests, searches and seizures. • Aliens may be deported if they willingly refuse to pay taxes. • Inspection of book of accounts. • Inquiring into bank accounts.