The Philippine Taxation

• Taxation Is the inherent power of the state to demand enforced contributions for public purposes.
• Taxes are enforced proportional contribution from persons and property, levied by the state by virtue of its sovereignty for the support of the government and for all its public needs
• Necessity Theory The existence of the government is necessity. It cannot continue without a means to pay its expenses and therefore has a right to compel all citizens and property within its power to contribute.
• Benefits – Protection/Reciprocity Theory Obligation to pay taxes is involuntary and compulsory, in exchange for the protection and benefits one receives from the government; taxes are paid for the enjoyment of the benefit of organized society.
• Obligation to pay taxes is involuntary and compulsory, in exchange for the protection and benefits one receives from the government; taxes are paid for the enjoyment of the benefit of organized society.

  Benefits – Protection/Reciprocity Theory
• The following are some means on which a taxpayer may minimize if not to escape the payment of taxes:

  Tax Exemptions, Tax Avoidance, and Tax Evasion.
• No law granting any tax exemptions shall be passed without the concurrence of a majority of all the members of the Congress.
• Three types of Tax exemption:

  Express, Implied and Contractual
• Tax avoidance It is reducing or totally escaping payment of taxes through legally permissible means.
• Tax Evasion It is the illegal means of escaping taxation. A Scheme used outside of those lawful means and when availed of, usually subjects the taxpayer to (further or additional) civil or criminal liabilities.
• Tax Amnesty Is a general pardon or intentional overlooking by the State of its authority to impose penalties on persons otherwise guilty of evasion or violation of a revenue or tax.
• Tax Amnesty It partakes absolute waiver by the government of its right to collect what is due it and to give tax evaders who wish to relent a chance to start with a clean slate.
• Express – when exemptions are expressly granted by the Constitution, Statutes, Treaties, franchises or similar legislative acts; an example of which is the exemptions from real property.
• Implied – whenever particular persons, properties or excises are deemed exempt as they fall outside the scope of the taxing provision itself;
• Contractual – when in consideration of contractual agreement with the government.
• December 19, 2017, the President Rodrigo Duterte signed into law Package 1 of the Comprehensive Tax Reform Program also known as the Tax Reform for Acceleration and Inclusion (TRAIN) as Republic Act (RA) No. 109631.
• is the first package of the comprehensive tax reform program (CTRP) envisioned by President Duterte’s administration, which seeks to correct a number of deficiencies in the tax system to make it simpler, fairer, and more efficient.

  Tax Reform for Acceleration and Inclusion (TRAIN)
• It also includes mitigating measures that are designed to redistribute some of the gains to the poor.

  Tax Reform for Acceleration and Inclusion (TRAIN)