Taxation

• TAXATION

  • Is the inherent power of the state to demand enforced contributions for public purposes.
• SCOPE OF TAXATION

  • It covers persons, property, or occupation to be taxed within the taxing jurisdiction.
  • It is inherent in the power to tax that a State be free to select the subjects of taxations. 
  • Generally, 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 WAS TAXATION STARTED

  • In the 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:
  • Revenue Raising from those collected taxes that are intended primarily to finance the government and its activities; and 
  • Non– Revenue/Sumptuary Purposes for: 
  • Promotion of General Welfare,
  • Regulation,
  • Reduction of Social  
  • Inequality/Compensatory Purpose,
  • Encourage Economic Growth and 
  • Protectionism.
• Inherent Limitations

  • such as Situs or Territoriality of Taxation; Public Purpose; International Comity; Non-delegability of power; and Exemption of government from taxation
• • Constitutional Limitation


  such as Due Process of Law and Equal Protection of Law.
• THE BASIS OF TAXATION IS FOUNDED ON THE LIFE BLOOD THEORY. 

  • Without taxes, the government would be paralyzed for lack of the motive power to activate and operate it.
• Necessity Theory


  The existence of the government is a 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.
• Tax Exemptions


  The inherent power of the State to impose taxes naturally carries with it the power to grant 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.
• • Implied


  whenever particular persons, properties or excises (tax levied on certain goods and commodities) are deemed exempt as they fall outside the scope of the taxing provision itself; and
• Contractual

  • when in consideration of contractual agreement with the government.
• Tax Avoidance


  It is reducing or totally escaping payment of taxes through legally permissible means.
• Tax Evasion


  It is an 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
• THE TRAIN LAW

  • 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.
• THE 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.