The manner and mode of enforcement and collection, The situs of taxation - may be exercised only within the territorial jurisdiction of the taxing authority, Public purpose - for general welfare. The tax base for domestic corporations and resident foreign corporations is taxable income (gross income less allowable deductions) [30% regular corporate income tax] or gross income [2% minimum corporate income tax], whichever is applicable. The lifeblood theory constitutes the theory of taxation, which provides that the existence of government is a necessity; that government cannot continue without means to pay its expenses; and that for these means it has a right to compel its citizens and property within its limits to contribute. Basis of taxation C. Scope of taxation B. Situs of taxation D. Theory of taxation. (Inutos na nga sa kanila ng Constitution tapos iuutos pa nila sa iba), Exemption of Government Agencies/Instrumentalities exercising essential  governmental function. PDF. Download Free PDF. Reciprocal Duties - (Benefits-Received or Compensation Theory) In return for the contribution of the taxpayer, he receives the general advantages and protection which the government affords the taxpayer and his property. Constitution: Article VI, Section 28 of the Constitution states that "the rule of taxation shall be uniform and equitable" and that " Congress shall evolve a progressive system of taxation ". Tax structure of pakistan Abdul Basit. Take note that they are NOT involved in the collection thereof. the government, in the exercise of its civil remedy in collecting the tax due may, b, y distraint of personal property or by levy of real property, take the same to satisfy the tax liability if. they are not supposed to be used for private purpose. Centanni is editor of Political Geography Now at www.polgeonow.com. The total tax requirement is the area (ABEO) out of which A is willing to pay GCEO and B is willing to pay FDEO. It is levied by the law-making body of the state - the power to tax is vested unto the Congress i.e. Reciprocal Duties - (Benefits-Received or Compensation Theory) In return for the contribution of the taxpayer, he receives the general advantages and protection which the government affords the taxpayer and his property. It is proportionate in character - the share of the taxpayer on the public burden is essentially based on one's ability to pay. FDI and Corporate Taxation: The Philippine Experience; Rafaelita M. Aldaba, Republic of the Philippines Department of Finance: Comprehensive Tax Reform Program, Reforming the Philippine Tax System: Lessons from Two Tax Reform Programs (Abstract); Benjamin E. Diokno, Bureau of Internal Revenue, Republic of the Philippines: Tax Reform Act of 1997. Transformation - the manufacturer or producer 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. Criminal in nature b. Taxes are levied in almost every country of the world, primarily to raise revenue for government expenditures, although they serve other purposes as well. 685 The tribute was a personal tax of the nature of a uniform poll tax and was the only direct tax universally enforced. In February 1994, a presidential task force was charged with developing a new Comprehensive Tax Reform Program (CTRP) to increase revenue by adjusting and simplifying the tax code. or. Download with Google Download with Facebook. Baka dahil maganda lang pakinggan Hahaha. Simultaneously, the tax shares of A and B are determined by their individual demand schedules. The main theories or principles in brief, are: (i) Benefit Theory: According to this theory, the state should levy taxes on individuals according to the benefit conferred on them. The following may be included as subject/object: business, transaction, rights or privileges. The policy of taxation in the Philippines is governed chiefly by the Constitution of the Philippines and three Republic Acts. According to the theory, taxes should be based upon the amount of money people earn. Fiscal Adequacy - the source of revenue should be sufficient to meet the demands of public expenditure. The economists have put forward many theories or principles of taxation at different times to guide the state as to how justice or equity in taxation can be achieved. (Sa madaling salita, hindi dapat pahirap sa pagbabayad. Since 1997 it has become widely regarded as a failure, with few simplifications and an actual fall in tax revenue. Over the decades the government of the Philippines has struggled with economic issues, with a major executive and legislative effort to improve the country’s tax system occurring in the mid-1990s during the administration of President Fidel V. Ramos. The thin nebula of hedonism in reverse is no longer adequate. This law took effect on January 1, 1998. PDF. Compute for the Income Tax; Tax computation in the Philippines changed this January 2018 in the form of the Tax Reform Bill of the Duterte Administration. The power of taxation proceeds upon the theory that the existence of the government is a necessity, that it cannot continue without means to pay its expenses and that for this means it has a right to compel all its citizens and property within its limits to contribute. Tax Evasion - the use of illegal or fraudulent means to defeat or lessen the payment of a tax. wala na matitira sa sweldo ko? It is an enforced contribution - tax is not voluntary and its imposition is in no way dependent upon the will or assent of the person being taxed. There are four main types of national internal revenue taxes: income, indirect (value-added and percentage taxes), excise and documentary stamp taxes, all of which are administered by the Bureau of Internal Revenue (BIR). Q: What is Real Property Tax? Rodrigo Duterte on December 19, 2017.The implementation of the TRAIN law began on January 1, 2018. Secondary Purpose (Non-revenue) - to regulate, SOURCES OF REVENUE (Section 21 of the Tax Code). The Philippine taxation system has been and is still in a state of dynamic transformation since January 2018, with the government heading towards accelerating poverty reduction, minimizing inequality, and generating revenues to invest in the Filipino people and infrastructure. One of the characteristics of internal revenue laws is that they are: a. No need to be fancy, just an overview. Primary Purpose (Revenue/Fiscal) - to raise revenues for the support of the government. Learn more about taxation in this article. The rule of taxation shall be uniform and equitable. (Base ang buwis sa kakayahan na mgbayad. It is awesome - I don't know why. International comity - the property of a foreign state or government may not be taxed by another. Evan Centanni specializes in world cultures and human geography. Subject to inherent and constitutional limitations, the power of taxation is regarded as supreme, plenary, unlimited and comprehensive. UNDERSTANDING TAXATION IN THE PHILIPPINES. The subjects or objects to be taxed may be persons (natural or juridical) or property (real or personal, tangible or intangible. This paper. Once you have computed for your taxable income, proceed to computing for the income tax. The Congress determines who to tax, what to tax and how the tax shall be collected. The basis is the reciprocal duties of… Download Full PDF Package. BASIS OF TAXATION “ BENEFITS-RECEIVED PRINCIPLE ” reciprocal duties of protection and support between the state and its inhabitants 7. It also set a two percent minimum for corporate income tax, imposed a final withholding tax on dividends and increased personal income exemptions. The current tax table is relatively simpler, and allows employees to take home more money than before. Computation of income tax Marvin Morales. Free PDF. TAXA TION ZN THE PHILIPPINES. Taxation is administered through the Bureau of Internal Revenue which comes under the Department of Finance. Spaniards resident in the islands were exempt. (Kasama na jan ung mga ambassador at iba pang diplomatik). That is the reason why we have appropriations: the Heads of Departments submit to the Congress their estimated expenses for the following year - parang feasibility study; then titignan kung ok ba o hindi; pag may budget na pagkukunan ayos lang. Taxation, imposition of compulsory levies on individuals or entities by governments. BASIS OF TAXATION Principle of Necessity - without money, the government cannot pay its expenses and therefore cannot exist. It is legislative in character - the power to tax is pecuniary and exclusively vested to the Congress. The lifeblood theory underscores that taxation is the most superior power of the State. A. Several parts of the reform package were adopted and passed separately by the Congress of the Philippines during 1996. “ LIFEBLOOD THEORY” THEORY OF TAXATION 6. Despite successful tax reforms in 1986, in less than a decade new tax exemptions had reduced the Philippines’ tax revenue to among Southeast Asia’s lowest. Premium PDF Package. Write something about yourself. Basis of taxation C. Scope of taxation B. Situs of taxation D. Theory of taxation Theory and basis of taxation (1) The power of taxation proceeds upon the theory that the existence of government is a necessity; that it cannot continue without means to pay its expenses; and that for these means it has a right to compel all its citizens and property within its limits to contribute. It implemented a gradual rate reduction from 35 percent to 32 percent for both corporate income and the top margin of individual income. (Tax minimization - legal), Tax  treaties and conventions with foreign countries. The Philippines are a group of islands in Southeast Asia which have been an independent country since 1946. Situs or territoriality - As a rule, the taxing power cannot go beyond the territorial limit of the taxing authority. Taxation in the Philippines CheryLanne Demafiles. Create your own unique website with customizable templates. This code underwent substantial revision with passage of the Tax Reform Act of 1997. It is levied for public purpose or purposes - taxes are spent to support government i.e. Below are the frequently asked questions on real property tax in the Philippines. Taxation - Taxation - History of taxation: Although views on what is appropriate in tax policy influence the choice and structure of tax codes, patterns of taxation throughout history can be explained largely by administrative considerations. Advantages and limitations. GENERAL PRINCIPLES OF TAXATION FUNDAMENTAL PRINCIPLES IN TAXATION. The property being a property located in the Philippines, it is subject to the Philippine estate tax irrespective of the citizenship or residence of the decedent (Sec. Paano kung kulang ang budget pero kailangan talaga? within the Philippines. CONCEPT OF TAXATION  Taxation is the inherent power of the state to impose and demand contribution upon persons, properties, or rights for the purposes of generating revenues for public purposes. Halimbawa: (1) kaya madami ang opisina o Districts para hindi mahirapan ang madlang people, (2) kaya in-accredit and mga banko (hindi ibig sabihin nito na walang tiwala ang BIR sa mga collection agent) para mapadali ang pangongolekta at pagbabayad, (3) yung Electronic Filing and Payment System o EFPS ginawa nila para hindi hassle), Constitutional Limitations - (Naaayon sa ating saligang batas), Exemption of property actually, directly and exclusively used for religious, charitable and educational purpose (Section 30 of the Tax Code), Levy - it is the legislative act that determines that a tax of a certain amount or of a certain percentage shall be imposed on the persons, properties, or acts subject thereto. The Philippines’ new tax reform bill, known as TRAIN or Tax Reform for Acceleration and Inclusion, was signed into law by Pres. (Basically, ito yung pag gawa ng batas), Assessment - it is the official action of an officer authorized by law in ascertaining the amount of tax due under the law from a taxpayer. There is no international double taxation … (2.5%) (2016 BAR) SUGGESTED ANSWER: (A) Yes. Republic Act No. ), Administrative Feasibility  - it should be capable of being enforced; not burdensome; convenient as to time and manner of payment. Principle of Necessity - without money, the government cannot pay its expenses and therefore cannot exist. Bill is introduced ) and the top margin of individual income more money than before Adequacy the. Purpose or purposes - taxes are spent to support government i.e: a to defeat or lessen payment. 32 percent for both corporate income and the top margin of individual income income and the top margin of income. Tax Evasion - the share of the TRAIN law affect incomes taxes of individuals and business enter­prises nebula of in. 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