Economics 20.

1 Economics Department
Xavier University- Ateneo de Cagayan

Chapters 8, 9 and 10

Chapter 8: Taxation
Taxation is an Inherent power of the state Needed to carry out functions

Purpose : Fund raising

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Chapter 8: Taxation
Characteristics 1. Enforced 2. Payable by money 3. Proportionate 4. Levied in person/property 5. Levied by state (w/c has jurisdiction) 6. Specifically by law-making body 7. For public purpose
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Chapter 8: Taxation
Nature 1. Inherent in sovereignty essential for all governments. 2. Legislative congress can impose taxes. 3. Subject to constitution and laws

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Chapter 8: Taxation
Principle of Sound tax 1. Fiscal Adequacy: Supply of Funds and Demand 2. Equality/Justice: Rawlsian wayproportionate burden towards ability to pay. 3. Administrative Feasibility: Effectively Administered.

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Chapter 8: Taxation
Classifications 1. By subject: a) Individual fixed tax Personal poll capitation e.g residence certificate. b) Property tax e.g real estate tax. c) excise tax -for doing something e.g business tax; VAT 2. By purpose: a) Revenue tax e.g. income tax b) Special tax e.g. duties

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Chapter 8: Taxation
3. By scope: a) National b) Local 4. By Determination of amount: a) Specific excise tax on wines, amusement tax. b) Ad valorem real estates tax, percentage tax.

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Chapter 8: Taxation
5. By payee: a) Direct b) Indirect 6. By graduation rate: a) Proportional b) Progressive c) Regressive A tax is toll license fee debt penalty

10/2/2011 .. But these can be tariffs or duties

Chapter 8: Taxation
Kinds (according to the Law) 1) National - Tariff & Customs Code 2) Local - LGC. Kinds of NIRT :

1) income tax 2) estate tax 3) donor/gift tax 4) VAT 5) excise tax 6) doc. Stamp tax..(ex. SPA) 7) duties; travel tax; energy tax ; vehicle tax.

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Chapter 8: Taxation
Income tax (Personal) Taxable income: (less deduction) exemptions: ( by NIRC) -min. wage earns. -1 worker of HH ( 50,000) -each dependent not exceeding 4 ( 25,000)
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Privilege tax..
Based on gross

Chapter 8: Taxation
A dependent child is: legitimate, leg. Adopted < 21; cant support him/herself A recognized child is outside wedlock and recognized

So: Taxable income = GI - E

Steps: After getting the taxable income, Look at the table and follow the rule Subtract any withholding tax if there is. 10/2/2011 11

Chapter 9: Agrarian Reform

Land reform Redistribution of rights of ownership

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and/or the use of land away from the landowners and in favor of the poor who cultivated it. Examples: land tenants in family farms, large estates to small families, dividing equally large lands to small settlements IN OTHER WORDS, THOSE WHO TILL MUST OWN THE LAND

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Chapter 9: Agrarian Reform Definitions

Reform: fixing a

malfunctioning condition Land Reform: reforming land property rights among workers and owners due to agrarian structure defects.

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Chapter 9: Agrarian Reform

Definitions
Agrarian structure: is

composed of agricultural structure and its land tenure systemregulation of rights Production- operation Services system- credit, marketing and supply of agricultural materials
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Chapter 9: Agrarian Reform

Agrarian Reform Farmers should own the land

they cultivated to INCREASE THEIR QUALITY OF LIFE AND TO EMPOWER THEM. Comprehensive Agrarian Reform Program (CARP) A law passes in 1988 (RA 6657) which entails agrarian reform.

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Chapter 9: Agrarian Reform

CARP law

Redistribute land fairly,

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regardless of crops and fruits produced to farmers and workers who are landless irrespective of their tenure system. Includes profit sharing, stock sharing, access to credit, production methods, etc. Exceptions: those for urbanization and government programs and others( i.e. churches)

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Chapter 9: Agrarian Reform

Other provisions: Retention limit: max of five

(5) hectares to be owned. Qualifications: aged 15 and above and already worked for the land as of 1988. Components: Land distribution- own the land they worked. Companion measures- be successful owners.
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Chapter 9: Agrarian Reform

Companion measures Access to credit Improved facilities of

infrastructure Better production methods Cooperatives

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Chapter 9: Agrarian Reform

Land reform Land tenure problems arise because

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of increasing population, destruction of land, urbanization, etc. Important because: It corrects semi-feudal land system of the Phils. Upholds economic freedom Improves farming Liberates capital for new industries (i.e. non farm employment) Uplifts poverty and democracy
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Chapter 9: Agrarian Reform

Goals Increase income and security Develop skills among farmers Objectives Operational: transfer titles,

improve capabilities,etc. Political: eradicate feudalism, increase democracy Economic: increase development, production Social: remove inequalities
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Chapter 10: Consumer Education

RA 7394 (CONSUMER ACT OF 1992) Mandates:

Develop and provide safety

and quality standard for consumer products (including the use and practice) Assist the consumer in evaluation. Protect the public versus threats of using the product, if there is. Do R&D to improve quality
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Chapter 10: Consumer Education

Scope All firms (foreign and

domestic) National Council for Consumer Affairs (NCAC) Oversees these mandates Implementing agencies DOH (drugs) DA (agricultural products) DepEd (consumer education) LGU (unprocessed foods) DTI (consumer products)
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Chapter 10: Consumer Education DTI

Tasked against deceptive

and unfair sales or practices Deceptive, if a consumer is manipulates in buying the product Unfair, if the seller takes advantage of the ignorance, mental infirmity, physical incapability of the consumer.
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Chapter 10: Consumer Education

Applications: If the complainant is a natural

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person Subject is a consumer product Nature of the complaint is either about fairness and deception. Areas of concern: Quality and safety Deceptive/unfair practice Warranties Labeling, packaging, price tags Advertising/promotiions Repair/service shops

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Chapter 10: Consumer Education Investigation is done after filing for a petition. For sellers:
Within 2 years of consumer

transaction For warranties need to:

Set the terms Parties

Coverage and expiration

What to do in case of defects What he can avail
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Chapter 10: Consumer Education Penalties are given Amicable settlements

Returning the product
Refunds Restitution

. .depending on the nature of complaint.

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Chapter 10: Consumer Education

Consumer rights

1. Basic needs guarantee

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survival 2. Safety- against hazardous goods 3. Information- against dishonest or misleading ads and the right to information needed to make an informed choice on buying. 4. Choose- choosing competitive products at good quality and price

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Chapter 10: Consumer Education Consumer rights

5. Redress- to be

compensated from unsatisfactory service. 6. Representation- express consumer interest in government policies 7. Consumer education 8. Healthy environment

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Chapter 10: Consumer Education Consumer Responsibilities

1. Critical awareness- alert in the
2. 3.

4.

5.
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price and quantity of the goods Action- ensure a fair deal Social concern aware of the impact of our consumption to our citizens (esp. the powerless) Environmental awareness aware of the impact of our consumption to our environment Solidarity- unite to promote consumer protection and interest.
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Chapter 10: Consumer Education

Types of consumer
1. Bargain addict

-Crazy with sales regardless of the quality and presence of deceitful traders. (e.g. buy 1 take 1) 2. Wasteful consumer -Doesnt save goods (light, water, food becomes spoiled). 3. Impulsive buyer -Buys anything she likes and regrets afterwards, tempted with ads
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Chapter 10: Consumer Education

4. Close-fisted (silas marner)

-Keeps money even if deprived (e.g. saving for load when the stomach is empty) 5. Panic buyer -Gullible with rumors and hoards. 6. Spend-thrift -Spends on anything luxurious 7. Intelligent buyer -Prioritizes her needs and limits purchases with her ability to pay.
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