TAX QUIZ 1

Taxation- The act of laying tax . The means by which the sovereign
through it’s law making body, raises income to defray the necessary
expenses of government.

Tax-enforced proportional and pecuniary contributions from persons and

property levied by the law making body of the state having jurisdiction
over the subject of the burden for the support of the government and all
public needs

Aspects of taxation -
1. Levying or imposition of tax (taxation proper)

2. Collection of tax levied (tax administration)

Basic principles of a sound tax system, define each

1. Fiscal adequacy- should be sufficient to meet the demands of public
expenditures

2. Equality or theoretical justice- tax burden should be distributed in

proportion to the taxpayer’s ability to pay

3. Administrative feasibility

Direct
Tax which is demanded or exacted from the very person who also
shoulders the burden of tax example corporate and income tax, estate,
donors tax

indirect

Tax which is demanded from or are paid by one person in the expectation
and intention that he shall indemnify himself at the expense of another by
passing on the burden to the latter. ex. VAT, Percenge tax, customs duties,

Regressive tax
Tax the rate of which decreases as the tax base or bracket increases. The
tax rate and tax base move in opposite directions. (NO regressive tax)

Progressive tax
Tax the rate of which increases as the tax base or bracket increase

ex. Income tax, estate, donor’s

Regressive system—
More indirect taxes imposed than direct taxes. (applies in soceities which
majority of people have low income

Progressive system-
Tax laws shall place emphasis on direct rather than indieect taxation

Enumerate the constitutional limitations and inherent

Constitutional: DENR-NENE-CPN
1. Due process of law

2. Equal protection of the laws

3. Rule of uniformity and equity in taxation

4. No imprisonment for non payment of a poll tax

5. Non impairment of obligations of contracts

6. No infringement of religious freedom

7. Exemption from religious, charitable, and educational entities, no profit

cemeteries, churches

8. Exemption of non stock non profit educational institutions from

taxation

9. Concurrence by majority of all the members of the congress for

passage of law granting tax exemptions

10. Power of president to veto any particular item or items in a revenue or

tariff bill

11. Non impairment of the jurisdiction of the supreme court in tax cases

Inherent: I-N-E-R-T
1. Requirement levy for public purpose

2. Non delegation of the power to tax

3. Exemption from taxation of government entities

4. International comity

5. Territorial juristiction

Incidence of taxation
Is that point on which the tax burden finally rests or settles down. Takes
place when hitting has been effected from the statutory taxpayer to
another or someone else who cannot pass the burden further.

Impact of taxation
Is that point on which a tax is originally imposed. Payment of tax payer

Tax evasion
Use of tax payer of illegal means or fraudulent means to defeat or lessen
the payment of tax. Tax dodging, punishable by law.liable to civil and
criminal liabilities. No proceeds. Absence of taxation

Ex. Deliberate failure to report taxable income

Elements:

1. End to be achieved

2. Bad faith

3. Course of action

Tax avoidance.
Called tax planning. Use of taxpayer legally permissible alternative tax
rates or methods of assessing taxable property or income. TP uses tax
saving device allowed by law. No law is violated.

PHASES OF TAXATION

PURPOSE OF TAXATION
Revenue
Regulation

Theory and basis of taxation

Inherent powers of the state

Can a law imposing tax on revenues earned by churches and other

religious institutions

May the court enjoin collection of tax