It is an enforced contribution.
It is proportionate in character.
It is generally payable in money.
It is levied on persons or property.
It is levied by the sate which has jurisdiction over the person or
property.
6. It is levied by the law-making body of the state,
7. It is levied for public purpose of purposes.
C. Theory, basis and nature of taxation
1. Lifeblood doctrine or Necessity Theory
2. Benefits-received principle.
D. Extent of the legislative power to tax
1.
2.
3.
4.
II. CLASSIFICATIONS/DISTINCTIONS
A. As to subject matter or object
1. Personal, poll or capitation (Ex. Community tax)
2. Property (Real Estate Tax)
3. Excise (Professional Tax)
B. As to who bears the burden
1. Direct tax (Income Tax)
2. Indirect tax (Value Added Tax)
C. As to determination of amount
1. Specific Tax (Taxes on distilled spirits, wines, liquors, cigarettes)
2. Ad valorem Tax (Real Estate Tax)
D. As to purpose
1. General, fiscal or revenue (Income tax, VAT)
2. Special or regulatory (Protective tariffs or custom duties
E. As to scope or authority imposing the tax
1. National tax (National internal revenue taxes)
2. Local tax (Real estate tax)
F. As to graduation or rate
1. Proportional (real estate tax)
2. Progressive or graduated (income tax)
3. Regressive
III. DISTINCTIONS FROM OTHER SOURCES OF INCOME
A.
B.
C.
D.
E.
F.
G.
3. Onward shifting
B. Capitalization means the reduction in the price of the taxed object equal
to the capitalized value of future taxes which the Purchaser expects to be
called upon to pay.
Transformation the method of escape whereby the manufacturer or
producer upon whom the tax has been imposed, fearing the loss of his
market if he should add the tax to the price, pays the tax and endeavors to
recoup himself by improving his process of production thereby turning out
his units of products at a lower cost.
C. Tax Evasion (tax dodging) the use by the taxpayer of illegal or fraudulent
means to defeat or lessen the payment of tax
1. The end to be achieved
2. An accompanying state of mind which is described as being evil, in
bad faith, willful or deliberate and not accidental
3. A course of action which is unlawful
D. Tax avoidance (tax minimization) use by the taxpayer of legally
permissible alternative tax rates or methods of assessing taxable property
or income, in order to avoid or reduce tax liability
E. Tax exemption grant of immunity to particular persons or corporations or
to persons or corporations of a particular class from a tax which persons
and corporations generally within the same state or taxing authority are
obliged to pay
1. Power to exempt is naturally inherent to a state because it is an
attribute of sovereignty
2. It is not inherent to a local government unit since municipal
corporations are not clothed with inherent power to tax
Grounds for Tax exemption
1. May be based on contract in which case the public represented by the
government is supposed to receive a full equivalent therefor
2. May be based on some ground of public policy
3. May be created in a treaty on grounds of reciprocity or to lessen the
rigors of international double or multiple taxation
Nature of Tax Exemption
1. A mere personal privilege of the grantee
2. Generally revocable by the government unless exemption is founded
on a contract
3. Implies a waiver on the part of the Government of its right to collect
what otherwise would be due to it
4. Not necessarily discriminatory so long as the exemption has a
reasonable foundation or rational basis
Kinds of Tax Exemption
1. As to manner of creation;
a. Express or affirmative exemption
b. Implied exemption or exemption by omission
2. As to scope or extent:
a. Total
b. Partial
3. As to object:
a. Personal
b. Impersonal
Construction of tax exemption statutes
- NATIONAL TAXATION
I. NATIONAL INTERNAL REVENUE TAXES
A.
B.
C.
D.
E.
Income taxes
Estate tax
Donors tax
Value-added tax
Other percentage taxes
1. On small business enterprises
2. On carriers and keepers of garages
3. On franchise holders or grantees
4. On persons paying for overseas communications service
5. On banks and non-bank financial intermediaries performing quasibanking functions
6. On other non-bank financial intermediaries
7. On life insurance companies and agents of foreign insurance
companies
8. On proprietors, lessees or operators of amusement places
9. On winners of prizes in horse races and jai-alais and owners of
winning race horses
10. On sale, barter, exchange of shares of stocks
F. Excise tax on certain goods
G. Documentary stamp tax
H. Such as other taxes as are or hereafter may be imposed by law and
collected by the Bureau of Internal Revenue
II. National taxes imposed by special laws
A.
B.
C.
D.
E.
F.
Customs duties
Sugar adjustment taxes
Taxes on narcotic drugs
Travel tax
Motor vehicle users charge tax
Energy taxes