Inctax

• Taxation may be defined as state power, a legislative process, and a mode of government cost distribution
• Taxation is an inherent power of the state to enforce a proportional contribution from its subjects for public purpose
• Taxation is a process of levying taxes by the legislature of the state to enforce proportional contributions from its subjects for public purpose
• Taxation is a mode by which the state allocates its costs or burden to its subjects who are benefited by its spending
• Every government provides a vast array of public services including defense, public order and safety, health, education, and social protections among others
• The government provides benefits to the people in the form of public services, and the people provide the funds that finance the government
• Taxation is a mode of allocating government costs or burden to the people
• The more benefit one receives from the government, the more taxes he should pay (Benefit Received Theory)
• Taxation should also consider the taxpayer's ability to pay (Ability to Pay Theory)
• Taxation is the life and blood of the government, essential for its operation (Lifeblood Theory)
• The power of the state to enforce proportional contribution from its subjects to sustain itself
• The power of the state to enact laws to protect the well-being of the people
• The power of the state to take private property for public use after paying just compensation (Eminent Domain)
• The scope of taxation is widely regarded as comprehensive, plenary, unlimited, and supreme
• Public services are normally provided within the boundaries of the state (Territoriality of Taxation)
• Taxpayers need to submit forms or documents to the government that show how much money they earned and how much tax they owe, then pay the taxes owed
• Sometimes, when a person or business pays money to someone else, they have to withhold a portion of that money as tax and send it to the government (Withholding of Taxes)
• In income taxation, residents, citizens, and domestic corporations are taxable on income derived within and outside the Philippines
• In transfer taxation, residents or citizens such as residents, citizens, non-resident citizens, residents aliens are taxable on transfers of properties located within or outside the Philippines
• In the UN convention, countries of the world agreed to co-equal sovereignty wherein all nations are deemed equal with one another
• Governments do not tax the income and properties of other governments
• Governments give primacy to their treaty obligations over their own domestic tax laws
• Tax is intended for the common good and must be exercised absolutely for public purpose
• The taxation power is broad, and the government can exercise the power upon anything including itself
• The legislative taxing power is vested exclusively in Congress and non-delegable to ensure a system of checks and balances
• The process of enacting a tax law by Congress involves determining the object of taxation, setting the tax rate, determining the purpose for the levy, kind of tax, appointment of the tax between national and local government, situs of taxation, and method of collection
• The act of administration and implementation of tax laws by the executive through its administrative agencies such as the Bureau of Internal Revenue (BIR) or Bureau of Customs (BOC)
• Situs is the place of taxation, and examples include business tax situs, income tax situs on services, income tax situs on sale of goods, property tax situs, and personal tax situs
• The power to tax involves the power to destroy (Marshall Doctrine)
• Tax laws are generally prospective in operation (Prospectivity of Tax Laws)
• Tax obligations cannot be assigned or transferred to another entity by contract (Non-Assignment of Taxes)
• Courts are not allowed to issue injunction against the government's pursuit to collect tax (Judicial Non-Interference)
• Occurs when the same taxpayer is taxed twice by the same tax jurisdiction for the same thing (Double Taxation)
• Double taxation can be minimized by providing tax exemption, allowing foreign tax credit, entering into treaties or bilateral agreements
• Tax evasion refers to illegally reducing or avoiding the payment of tax, while tax avoidance refers to legally reducing or escaping taxes by any permissible means
• Tax amnesty is a general pardon granted by the government for erring taxpayers to reform and have a fresh start, while tax condonation covers only the civil liabilities of taxpayers
• Thank You!