Introduction to Taxation 2

Introduction to Taxation John V. Balanquit

Objectives After the presentation, students should be able to: • Identify and distinguish the objects of taxation • Explain the doctrines of taxation • Explain the “situs of taxation”

Objectives (continued) • Identify the nature of taxes and explain the characteristics of taxes • Determine the classification of taxes • Distinguish taxes from other fees

Objects of Taxation • Persons (natural or juridical) • Properties (tangible or intangible, real or personal) • Excise objects (transactions, privilege, rights or interests)

Doctrines of Taxation • • • •

Prospectivity of tax laws Imprescriptibility of taxes Double taxation (indirect and direct) Escape from taxation (tax evasion vs tax avoidance) • Equitable recoupment

Doctrines of Taxation • • • •

Set-off of taxes Taxpayer suit Compromise Power to build and destroy

Situs of Taxation It is the “place” of taxation. It may be based on the: • Nature of tax • Citizenship and residence of taxpayer • Source of income • Place of the item subject to tax

Nature of Taxes Taxes are: • Obligations created by law • Generally personal to the taxpayer

Essential Characteristics of Taxes • • • • • •

Enforced contributions Imposed by the legislative body Proportionate in character Payable in the form of money Imposed for the purpose of raising revenue Used for public purpose

Essential Characteristics of Taxes • Enforced on persons, properties or rights • Commonly required to be paid in regular intervals • Imposed by the sovereign state within its jurisdiction

Classifications of Taxes As to Purpose • Revenue/Fiscal • Regulatory/Sumptuary

Classifications of Taxes As to Object • Personal/ Poll/ Capitation • Property • Excise

Classifications of Taxes As to Determination of Amount • Ad Valorem • Specific

Classifications of Taxes As to Who Bears the Burden • Direct • Indirect

Classifications of Taxes As to Authority or Scope • National (transfer taxes, income taxes, VAT, percentage taxes, excise taxes, documentary stamp tax) • Local (Community tax, municipal license tax, professional tax, real estate tax)

Classifications of Taxes As to Rate or Graduation • Proportionate/ Flat Rate • Progressive/ Graduated • Mixed

Other Fees • • • • • •

Penalty Revenue Debt Toll License fee Customs duties

Other Fees • • • •

Subsidy Tariff Margin fee Special assessment

End of Lecture. Thank You!