RPH - LESSON 19

• taxation


  the inherent power of the state to demand enforced contributions for public purposes.
• taxation


  the power by which the sovereign, through its lawmaking body, raises revenue to defray the necessary expenses of government.
• taxation


  way of apportioning the expenses of government among those who in some measure are privileged to enjoy its benefits and must bear its burdens.
• taxes


  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.
• scope of taxation


  It covers persons, property, or occupation to be taxed within the taxing jurisdiction.
• scope of taxation


  is inherent in the power to tax that a State be free to select the subjects of taxations.
• scope of taxation


  the legislature exercises such power however, upon valid delegation, the law-making bodies of LGUs and the President or as an incident of emergency powers that Congress may grant to him may exercise the power of taxation.
• when it started

  In prehistoric period, Filipino people paid taxes to the Datu for their protection
• Not paying of “buwis” or taxes was already punishable, but the Chieftain family members were exempted from paying taxes.
• Purposes and Objectives of Tax

  1. Revenue Raising from those collected taxes that are intended primarily to finance the government and its activities;
  2. Non– Revenue/Sumptuary Purposes for: (a)Promotion of General Welfare, (b) Regulation, (c) Reduction of Social Inequality/Compensatory Purpose, (d) Encourage Economic Growth and (e)Protectionism.
• Limitations in the Power of Tax

  Inherent Limitations

  (such as Situs or Territoriality of Taxation; Public Purpose; International Comity; Non-delegability of power; and Exemption of government from taxation)
• Limitations in the Power of Tax

  Constitutional Limitation

  (such as Due Process of Law and Equal Protection of Law).
• THE BASIS OF TAXATION IS FOUNDED ON THE LIFE BLOOD THEORY.
• Taxation is indispensable and inevitable price for civilized society, without taxes, the government would be paralyzed for lack of the motives power to activate and operate it.
• the collection of taxes must be made without hindrance if the State is to maintain its orderly existence
• 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.
• A tax creates civil liability on the part of the delinquent taxpayer although the non – payment thereof (due to failure or refusal to pay) creates a criminal liability which could be the subject of criminal prosecution under existing law.
• in taxation, it is one’s failure to comply with the civil liability to pay taxes which gives rise to the criminal liability. Nevertheless, taxes to be paid are personal to the taxpayer
• The following are some means on which a taxpayer may minimize if not to escape the payment of taxes:


  Tax Exemptions

  Tax Avoidance

  Tax Evasion
• tax exemption


  No law granting any tax exemptions shall be passed without the concurrence of a majority of all the members of the Congress.
• tax exemption


  The power to exempt from taxations as well as the power to tax is an essential attribute of sovereignty and may be exercised by virtue of the Constitution, expressly or by implication.
• tax exemption


  The inherent power of the State to impose taxes naturally carries with it the power to grant tax exemptions
• KINDS OF TAX EXEMPTIONS

  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.
• KINDS OF TAX EXEMPTIONS

  Implied – whenever particular persons, properties or excises are deemed exempt as they fall outside the scope of the taxing provision itself
• KINDS OF TAX EXEMPTIONS

  Contractual – when in consideration of contractual agreement with the government.
• Since taxation is the rule and the exemptions are the exception, the exemption may be withdrawn in the pleasure of the taxing authority. However, if the tax exemptions constitute a binding contract and for valuable consideration, the government cannot unilaterally revoke the tax exemptions.
• tax avoidance 


  reducing or totally escaping payment of taxes through legally permissible means.
• tax avoidance 


  This Method should be used by the taxpayer in good faith and at arm’s length
• tax avoidance 


  An example of which is the availing of all deductions allowed by law or refraining from engaging in activities subject to tax.
• tax evasion 


  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 evasion 


  An example of which is the failure to declare for taxations purposes the true and actual income derived from business for two (2) consecutive years.
• tax amnesty 


  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


  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.
• train law

  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.
• train law 


  The law provides for the amendments to several provisions of the National Internal Revenue Code of 1997 (NIRC of 1997) on personal income taxation, passive income for both individuals and corporations, estate tax, donor’s tax, value-added tax (VAT), excise tax, documentary stamp tax (DST), and tax administration, among others.
• train law 


  It likewise introduced new taxes such as the excise tax on cosmetic surgery and sugar-sweetened beverages.
• train law 


  The additional revenues that will be generated in the implementation of the Act shall be used to fund the President’s priority infrastructure and social programs that will ultimately benefit the poor.
• train law 


  RA 10963 was published in the Philippines’ Official Gazette last December 27, 2017 and took effect last January 1, 2018
• The Tax Reform for Acceleration and Inclusion (TRAIN) 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