TAXATION

• Power to Taxation is an inherent power of the government to impose and collect taxes. Its primary purpose is to raise revenues for public needs.
• Taxation is inherent, it is compulsory not voluntary
• BASIC PRINCIPLES OF TAXATION

  Fiscal adequacy: cover government expenses regardless of economic conditions.
• BASIC PRINCIPLES OF TAXATION

  Equality or theoretical justice: Taxes based on ability to pay.
• BASIC PRINCIPLES OF TAXATION

  Administrative feasibility: Clear, enforceable, and convenient for taxpayers.
• INHERENT LIMITATIONS OF THE POWER OF TAXATION

  Territorial jurisdiction: geographical limitations
• INHERENT LIMITATIONS OF THE POWER OF TAXATION

  Public purpose: common good
• INHERENT LIMITATIONS OF THE POWER OF TAXATION

  Non-delegation limits: legislative branch
• TYPES OF TAXES

  Income Tax on individuals' earnings, including salaries, wages.
• TYPES OF TAXES

  Value-Added Tax (VAT) imposed on the sale of goods and services at each production or distribution stage
• TYPES OF TAXES

  Excise Tax imposed on specific goods like alcohol, tobacco, fuel, etc.
• TYPES OF TAXES

  Real Estate Tax by local governments on land and property ownership.
• TYPES OF TAXES

  Local Business Taxes on businesses within local jurisdictions.
• FORMS OF ESCAPE FROM TAXATION

  Shifting transfers the burden from the original payer to another entity
• FORMS OF ESCAPE FROM TAXATION

  Evasion is the illegal action to evade tax payment
• FORMS OF ESCAPE FROM TAXATION

  Avoidance is legally reducing tax liability through permissible means.
• FORMS OF ESCAPE FROM TAXATION

  Exemption grants immunity from tax obligations to individuals or corporations.
• FORMS OF ESCAPE FROM TAXATION

  Transformation absorbing taxes into production costs.
• List of examples of exempted in tax:

  • Income earned by minimum wage earners
  • Charitable institutions
  • Scholarships
  • 13th-month pay and other bonuses (Maximum of P90,000)
  • Holiday pay
• Direct taxes are paid by individuals directly while indirect taxes are collected by intermediaries from consumers.
• Regulatory taxes were designed to achieve social and economic goals, regardless of whether revenue is raised.
• Fiscal taxes designed specifically to raise revenues for governmental needs
• The Bureau of Internal Revenue collects taxes imposed by the national government through income taxes, while at the local government level are collected by the local treasurer's office.
• The major source of revenue for local government units (LGUs), as outlined by the Local Government Code of 1991, is taxes collected by virtue of Republic Act No. 7160.
• The TRAIN Law, or Tax Reform for Acceleration and Inclusion, is a Philippine law that lowers personal income taxes while raising revenue through higher consumption taxes.