Principles Of Taxation

Mr. Clieford Perez, CPA, MBM

Bureau of Internal Revenue
Bureau of Internal Revenue

Tax Administration

It is a system involving assessment,

collection and enforcement of taxes, including the
execution of judgement in all taxes cases decided
in favor of the BIR by the courts.

3
Bureau of Internal Revenue

Powers and duties of the BIR

1. Assessment and collection of all national internal
revenues taxes, fees and charges
2. Enforcement of all forfeitures, penalties and fines
connected therewith
3. Execution of judgement in all cases decided in its favor
by CTA and ordinary courts
4. Give effects to and administer the supervisory and
police power conferred to it by the NIRC or other laws.

4
Bureau of Internal Revenue
Powers and Duties of the Commissioner of Internal Revenue
(CIR)
1. To interpret tax laws and to decide tax cases
2. To obtain information, and to summon, examine, and take
testimony of persons
3. To make assessments and prescribe additional requirements
for tax administration and enforcement
4. Power to Compromise Taxes
• Reasonable doubt as to validity of claim against
taxpayer
• Financial incapacity of taxpayer
5. Power to Abate or Cancel Tax Liabilities
• Excessive assessment 5
Bureau of Internal Revenue

Power to Make Assessments

1. To examine returns and determine tax due (whether there is filing of
return or not)
2. To conduct inventory-taking, surveillance and to prescribe
presumptive gross sales and receipts
3. To terminate taxable period
4. To prescribe real property values
5. To inquire into bank deposit accounts
• For determination of gross estate
• Compromise by reason of financial incapacity
6. To accredit and register tax agents
7. To prescribe additional procedural or documentary requirements
6
Bureau of Internal Revenue

Non-delegable powers of the Commissioner

1. The power to recommend the promulgation of rules and
regulations by the Secretary of Finance.
2. The power to issue rulings of first impression or to
reverse, revoke or modify any existing ruling of the
Bureau
3. The power to compromise or abate any tax liability
4. The power to assign or reassign internal revenue officers
to establishments where articles subject to excise tax are
produced or kept
7
Other terms in Taxation

Double Taxation – There is no provision in the constitution

specifically prohibiting the double taxation.

 Taxing twice, for the same purpose, in the same year or

period, the same subject by the same taxing jurisdiction,
same authority.

 Direct Double Taxation?

 Indirect Double Taxation?

8
Other terms in Taxation

Forms of Escape from Taxation

• Shifting
• Capitalization
• Transformation
• Evasion
• Avoidance
• Exemption

9
Other terms in Taxation

Global Tax System – Taxable income are grouped together

without distinction, and after deducting expenses and other
allowable deductions therefrom, are then subjected to
graduated tax rates.

Schedular Tax System – Income which are classified into

different categories, and are accorded different tax
treatments.

10
10th Topic is partially completed.
Thank you!