1. What is taxation?

Taxation is the process or means by which the sovereign, through its lawmaking body, raises income to
defray the necessary expenses of the government.
2. What are the purposes of taxation?
To provide funds or property with which to promote the general welfare of its citizens and to enable it
to finance it multifarious activities.
To strengthen anemic enterprises by giving tax exemptions
To protect local industries against foreign competition through imposition of high customs duties on
imported goods.
To reduce inequalities in wealth and income by imposing progressively higher taxes.
To prevent inflation by increasing taxes or ward off depression by decreasing taxes.
3. What are the theories and basis of taxation for its rationale?
THEORY
1. The existence of the government is a necessity.
2. The government cannot continue without a means to pay its expenses.
3. The government has the rights to compel its citizens and property within its limits to contribute.
BASIS
1. Taxation is based on the reciprocal duties of protection and support between the government and
its people.
2. The government receives taxes from the people which is used to perform functions of government
and other benefits.
3. Benefit-received theory.
4. What is the nature of taxation?
It is inherent in sovereignty
Legislative in character
Subject to constitutional and inherent limitations
5. What are the limitations of taxations?
1. Inherent limitations
Those imposed by the nature of the power itself
Requirement that levy must be for a public purpose
Non-delegation of the legislative power to tax, except:
1. Delegation to the president
2. Delegation to local governments
3. Delegation to administrative bodies
Exemption from taxation of government entities
International committee
Territorial jurisdiction
2. Constitutional limitations
Those imposed by the Philippines constitution
Public purpose
Non-delegation of taxing power
Tax exemption of the government
Territoriality of Situs of taxation
International treaty
6. What is an ITR according to the BRI?
ITR (Income Tax Return) is a tax on a persons income, emoluments, profits arising from property,
practice of profession, conduct of trade or business or on the pertinent items of gross income specified
in the Tax Code of 1997, as amended, less the deductions and/or personal and additional exemptions, if
any, authorized for such types of income, by the Tax Code, as amended, or other special laws.
7. Who are required to file income tax returns?
Resident citizens receiving income from sources within or outside the Philippines
Non-resident citizens receiving from sources within the Philippines
Aliens, whether resident or not, receiving income from sources within the Philippines
Corporation shall include partnerships, no matter how created or organized
Domestic corporations receiving income within and outside the Philippines
Foreign corporations receiving income from sources within the Philippines
Estates and trusts engaged in trade and business
8. When is the best time to file your taxes?
Before or on April 15
9. What forms are needed to file ITRs for individual employees earning compensation and self-employed
individuals required to file income tax returns?
BIR Form No. 1700
BIR Form N0. 1701
10. What for are the following forms?
I. BIR form 1700
Annual Income Tax Return for individuals earning purely compensation income (Including Non-
Business/Non-Profession Income )
II. BIR form 2316
Certificate of Compensation Payment / Tax Withheld For Compensation Payment With or
Without Tax Withhold
III. BIR form 1701
For Self-Employed, Estates, Trusts (Including those w/ both Business & Compensation Income)
IV. BIR form 2304
Certificate of Income Payment Not Subject to Withholding Tax (Excluding Compensation
Income)