VIDEO PRESENTATION

ORAL RECITATION!!

Base on the video what are

your idea/ideas or
understanding about taxation?
Lesson 1: Meaning and
Nature of Taxation
Prepared by: Rachel Mae D. Barde
Class Facilitator
At the end of this module, you are expected to:

Objectives 1. Define Philippine

taxation,
2. Understand the nature
and principles of taxation,
and
3. Enumerate and explain
the situs, objects and
limitations of taxation.
 TAXATION IS THE
CONCEPT OF TAXATION
INHERENT POWER THROUGH ITS LAW MAKING
OF THE STATE TO BODY
DEMAND
ENFORCED
CONTRIBUTIONS
RAISES INCOME TO DEFRAY
THE NECESSARY EXPENSES OF
GOVERNMENT
TAXATION IS THE ACT OF
LAYING A TAX
A WAY OF APPORTIONING THE
COST OF THE GOVERNMENT
 What is Taxation?
• Taxation has been defined as the power of the
sovereign to impose burdens or charges upon persons,
property or property rights for the use and support of
the government to be able to discharge its functions.

•It is one of the inherent powers

of the state – “power of the
sovereign”.
Three inherent power of the state:
FOR PUBLIC GOOD

FOR PUBLIC USE

FOR REVENUE
 What is the nature of the power of taxation?TAXATION
THE
IS

LIFEBLOOD OF
THE
1. It is inherent in sovereignty – the power of taxation exists GOVERNMENT
independent of any legislation.

2. It is legislative in character - But in the exercise of that power,

that power is assigned to the law-making body.

3. It is subject to constitutional and inherent limitations – To a

certain extent, Congress will abuse that power.
The power of taxation is:

Compulsory Comprehensive

Involuntary
 Principles of a Sound Tax System
1. Fiscal adequacy – means that the sources of revenue, taken as a
whole, should be sufficient to meet the varying levels of
expenditure, regardless of business condition and problems on
economic adjustment.

2. Theoretical justice – means the power of taxation should be based

on one’s ability to pay.

3. Administrative feasibility – the essence of administrative

feasibility is convenience.
Why the government should impose tax?
Raise
Revenue
Purpose
Safety and
of Protection
Taxation
Employment
Generation
 Stages of Taxation Power
1. Levying stage – This is legislative in character. This
is the role of Congress – determining and enacting a tax
law.
2. Assessment/Collection – Tax Administration
3. Payment of the Tax – Tax Administration
 Situs of Taxation
➢ Income tax - this is paid either in the place where the income is
earned or the place of residence of the taxpayer.
➢ Real property tax - this is paid where the property is situated.
➢ Personal property tax - taxes on intangible properties are paid
in the place where the property is located, similar to real property
tax. Situs of taxation of intangible properties is the owner’s
domicile. This refers to the place of permanent residence of the
owner.
➢ Business and occupation taxes - this is paid in the place where
the business or occupation is located.
 Objects of Taxation
➢ Individuals who earn a considerable amount of income as a
worker, or as a businessman in partnerships or corporations,
including those who inherited a property or given a gift or donation
of a considerable value;
➢ Tangible and intangible properties, whether personal properties
(movable properties) that can be moved or relocated or real
properties (immovable properties); and
➢ Transactions, consumptions interests, imports and exports; and
privileges
 What are the limitations of taxation?
Inherent limitations are rooted in the nature of taxation itself.
These are the limitations that are not affected by changes in the
provisions of the constitutions.
✓ The tax revenues must only be used for public purpose.
✓ There should be proper delegation of legislative power to
tax
✓ Government entities are exempted.
✓ There are territorial jurisdictions.
✓ There is an observance of international law