Paying Taxes

A report by: Hannah Faye Valdez

 is also defined as the act of levying a tax, the
Taxation process or means by which the sovereign,
through its law-making body, raises income to
defray the necessary expenses of government.
It is a method of apportioning the cost of
government among those who, in some
measure, are privileged to enjoy its benefits
and must therefore bear its burdens.
A tax is a compulsory financial charge or some
Tax other type of levy imposed upon a taxpayer (an
individual or legal entity) by a governmental
organization in order to fund
government spending and various
public expenditures.
TYPES OF TAXES
IN THE
PHILIPPINES
 CAPITAL GAIN TAX
is a government fee on the profit
made from selling certain types
of assets. These include stock
investments or real estate
property. A capital gain is
calculated as the total sale price
minus the original cost of an
asset.
DOCUMENTARY STAMP
TAX
is an excise tax levied on
documents, instruments, loan
agreements and papers
evidencing the acceptance,
assignment, sale or transfer of an
obligation, rights, or property
incident thereto. The amount of
tax is either fixed or based on the
par or face value of the document
or instrument
 DONOR'S TAX
Donor's Tax is a tax on a
donation or gift, and is
imposed on the gratuitous
transfer of property between
two or more persons who are
living at the time of the transfer.
ESTATE TAX
The Estate Tax is a tax on your
right to transfer property at your
death. It consists of an
accounting of everything you
own or have certain interests in
at the date of death .
 INCOME TAX
is a tax that the government levies
on people’s income. People’s
incomes may be earned, such as
salaries, wages, or commission, or
unearned, such as rents, interest, or
dividends. Most entities, people or
businesses, are liable for income
tax. It is a major source of revenue
for the government, which uses the
revenue to fund activities and pay
its bills.
PERCENTAGE TAX
Percentage Tax is a business tax
imposed on persons or entities who
sell or lease goods, properties or
services in the course of trade or
business whose gross annual sales
or receipts do not exceed
P1,500,000 and are not VAT-
registered.
 VALUE- ADDED TAX
EXAMPLE:

VAT: 12%
PRICE: 860
A business tax imposed and collected
from the seller in the course of trade 860 ÷ 1.12
or business on every sale of VATable Sales =767.86
properties ( Real or Personal) lease 767.86 x 0.12
of good or properties or vendors of Vat Amount = 92.14
services an Indirect tax
CLASSES OF
TAXES
 Tax of a fixed amount imposed on persons residing within a specified territory,
1. Personal, poll or
whether citizens or not, without regard to their property or the occupation or
capitation tax business in which they may be engaged, i.e. community tax.

EX: Community Tax

2. Property tax Tax imposed on property, real or personal, in proportion to its value or in
accordance with some other reasonable method of apportionment.

EX: Real state Tax

For example, if the property tax rate is 4% and your house's assessed
value is $200,000, then your property tax liability equals ( .04 x
$200,000) or $8,000
 Excise taxes are internal taxes that are levied on the sale of specific goods
3. Excise tax and services, such as alcohol, fuel and tobacco. An excise tax is an indirect
tax that is not paid by the customers directly — instead, the excise tax is
imposed on the supplier or the producer, who then includes it in the product
price.

A general/fiscal/revenue tax is that imposed for the purpose of raising public

4. General/fiscal funds for the service of the government.
revenue tax

5. A special or regulatory tax is imposed primarily for the regulation of useful

Special/regulatory or non-useful occupation or enterprises and secondarily only for the purpose
tax of raising public funds.
 A direct tax is a tax an individual or organization pays directly to the
imposing entity. A taxpayer, for example, pays direct taxes to the
6. Direct tax government for different purposes, including real property tax, personal
property tax, income tax, or taxes on assets.

Indirect taxes are typically added to the prices of goods or services. Sales
7. Indirect
tax, value-added tax, excise tax, and customs duties are examples of
tax
indirect taxes.

8. National National taxes are imposed and collected by the national government
tax through the Bureau of Internal Revenue.
 tax that is paid to a local government authority, rather than to central
9. Local tax government, that helps pay for public services such as education, health,
waste collection etc

10. Specific A specific tax is a fixed amount of tax placed on a particular good. It is also
referred to as a per-unit tax, and the tax will depend on the quantity sold (not
Tax price).

Examples of specific taxes

● A tax of ₱25.82 on 500

ml sugary drinks.
● A tax of ₱253.05 per 20
pack of cigarettes.
● A tax of ₱48.42 per litre
of petrol.
 An ad valorem tax is a tax of a fixed proportion of the value of the property
with respect to which the tax is assessed. It requires the intervention of
11. Ad valorem assessors or appraisers to estimate the value of such property before the
tax amount due from each taxpayer can be determined.

For example, Bob owns a household worth $300,000, and pays property taxes to
the state government at 5% or $15,000. Recently, Bob’s house has an appraisal
performed. Now, he has to pay $20,000 in ad valorem taxes. What is the new
value of Bob’s land? See the following equation worked out:

Bob’s land = $400,000 = $20,000/.05

12. Proportional
A tax that takes the same percentage of income from all income groups
tax
 13.
A tax that takes a larger percentage of income from high-income groups than
Progressive from low-income groups.
tax
 A tax that takes a larger percentage of income from low-income groups than from
14. Regressive
high-income groups.
tax
ADVANTAGE OF TAXATION DISADVANTAGE OF
TAXATION

If all income earners

X
will pay the right
amount of tax, the
government can collect
more money to support
its objectives such as Taxes are
building roads, schools, disadvantageous
better government to the
salaries and improve entrepreneur
government services. because taxes
These factors can help lower your overall
attracting more
net profit.
investors and jobs in
the Philippines.
 THANKS
!
Do you have any questions?

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