basic principle of taxation
TRANSCRIPT
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BASICPRINCIPLE OFTAXATIONPrepared by :
Jinelle T. De Jesus
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Taxation is the inherent power of the sovereign,exercised through the legislature, to impose burdens
upon subjects and objects within its jurisdiction for the
purpose of raising revenues to carry out the legitimate
objects of government.
Taxation
It is also defined as the act of levying a tax, i.e. the
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 thosewho, in some measure, are privileged to enjoy its
benefits and must therefore bear its burdens.
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Taxes
Taxes are the enforced proportional contributions
from persons and property levied by the law-makingbody of the State by virtue of its sovereignty for the
support of the government and all public needs.
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Essential elements of a tax
1. It is an enforced contribution
2. It is generally payable in money.
3. It is proportionate in character.4. It is levied on persons, property, or the exercise of
a right or privilege.
5. It is levied by the State which has jurisdiction over
the subject or object of taxation.
6. It is levied by the law-making body of the State.
7. It is levied for public purpose or purposes.
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Purposes of taxation
1. Revenue or fiscal: The primary purpose of
taxation on the part of the government is to
provide funds or property with which to promote
the general welfare and the protection of itscitizens and to enable it to finance its multifarious
activities.
2. Non-revenue or regulatory: Taxation may also be
employed for purposes of regulation or control.
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Classification of Taxes
1. Personal, poll or capitation taxTax of a fixed amount imposed on persons residing
within a specified territory, whether citizens or not,
without regard to their property or the occupation or
business in which they may be engaged.
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.
3. Excise tax
A charge imposed upon the performance of an act,
the enjoyment of a privilege, or the engaging in an
occupation.
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As to purpose
1.General/fiscal/revenue tax
A general/fiscal/revenue tax is that imposed for the
purpose of raising public funds for the service of the
government.
2. Special/regulatory tax
A special or regulatory tax is imposed primarily for the
regulation of useful or non-useful occupation or
enterprises and secondarily only for the purpose of
raising public funds
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As to who bears the burden
1. Direct tax
A direct tax is demanded from the person who also
shoulders the burden of the tax. It is a tax which the
taxpayer is directly or primarily liable and which he or
she cannot shift to another.
2. Indirect tax
An indirect tax is demanded from a person in the
expectation and intention that he or she shallindemnify himself or herself at the expense of another,
falling finally upon the ultimate purchaser or consumer.
A tax which the taxpayer can shift to another.
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As to scope of the tax1. National tax
A national tax is imposed by the national government.
2. Local tax
A local tax is imposed by municipal corporations or
local government units (LGUs).
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As to the determination of amount
1. Specific tax
A specific tax is a tax of a fixed amount imposed by the
head or number or by some other standard of weight or
measurement. It requires no assessment other than the
listing or classification of the objects to be taxed.
2. Ad valorem tax
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 assessors or
appraisers to estimate the value of such property before
the amount due from each taxpayer can be
determined.
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As to gradation or rate
1. Proportional tax
Tax based on a fixed percentage of the amount
of the property receipts or other basis to be taxed.
Example: real estate tax.
2. Progressive or graduated tax
Tax the rate of which increases as the tax base or
bracket increases. Example: income tax.
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Digressive tax rate: progressive rate stops at a
certain point. Progression halts at a particular stage.
3. Regressive tax
Tax the rate of which decreases as the tax base or
bracket increases. There is no such tax in the Philippines.
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1) Situs or territoriality of taxation
2) Must be for a Public purpose
3) International comity
4)Non-delegability of the taxing power
5) Exemptions of Government agencies
INHERENT LIMITATIONS
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Constitutional limitations
1. Due process of law
2. Equal protection of laws
3. Rule of uniformity and equity in taxation
4. Prohibition against imprisonment for non-
payment of poll tax
5. Prohibition against impairment of obligation of
contracts
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6. Prohibition against infringement of religious
freedom
7. Prohibition against appropriation of proceeds of
taxation for the use, benefit, or support of any church
8. Prohibition against taxation of religious,
charitable and educational entities
9. Prohibition against taxation of non-stock, non-
profit educational institutions
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The End
Thank
you!