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    Gen. Principles of Taxation

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    Pageduesca Rouel
    This document provides an overview of general principles of taxation. It defines taxation as a means for government to raise funds through laws. The purposes of taxation are to fund government activities and promote general welfare. Taxes also aim to reduce inequality and influence economic conditions. A sound tax system should have fiscal adequacy, equality or fairness, and administrative feasibility. The document also discusses the theory, basis, nature, limitations and aspects of taxation.

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    Gen. Principles of Taxation

    Uploaded by

    Pageduesca Rouel
    308 views22 pages
    This document provides an overview of general principles of taxation. It defines taxation as a means for government to raise funds through laws. The purposes of taxation are to fund government activities and promote general welfare. Taxes also aim to reduce inequality and influence economic conditions. A sound tax system should have fiscal adequacy, equality or fairness, and administrative feasibility. The document also discusses the theory, basis, nature, limitations and aspects of taxation.

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    This document provides an overview of general principles of taxation. It defines taxation as a means for government to raise funds through laws. The purposes of taxation are to fund government activities and promote general welfare. Taxes also aim to reduce inequality and influence economic conditions. A sound tax system should have fiscal adequacy, equality or fairness, and administrative feasibility. The document also discusses the theory, basis, nature, limitations and aspects of taxation.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    308 views22 pages

    Gen. Principles of Taxation

    Uploaded by

    Pageduesca Rouel
    This document provides an overview of general principles of taxation. It defines taxation as a means for government to raise funds through laws. The purposes of taxation are to fund government activities and promote general welfare. Taxes also aim to reduce inequality and influence economic conditions. A sound tax system should have fiscal adequacy, equality or fairness, and administrative feasibility. The document also discusses the theory, basis, nature, limitations and aspects of taxation.

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    of 22

    General Principles

    of Taxation
    Tax 111 Income Taxation
    Ferdinand C. Importado
    CPA, MBA
    Objectives

    At the end of this lecture, the students shall


    be able to:
    Define taxation.
    Discuss the purposes of taxation.
    Identify the theory and basis of taxation.
    Describe the principles of a sound tax
    system.
    List the nature of taxation.
    Objectives

    At the end of this lecture, the students shall


    be able to:
    Explain the limitations of taxation
    (constitutional and inherent).
    Identify the aspects of taxation.
    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.
    Purpose of taxation

    Primary purpose
    To provide funds or property with which
    to promote the general welfare of its
    citizens and to enable it to finance its
    multifarious activities.
    Purpose of taxation

    Secondary purposes
    To strengthen anemic enterprises by
    giving tax exemptions.
    To protect local industries against
    foreign competition through imposition of
    high customs duties on imported
    goods.
    Purpose of taxation

    Secondary purposes
    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.
    Theory and basis of taxation

    Theory
    The existence of the government is a
    necessity.
    The government cannot continue without a
    means to pay its expenses.
    The government has the rights to compel its
    citizens and property within its limits to
    contribute.
    Theory and basis of taxation

    Basis
    Taxation is based on the reciprocal duties of
    protection and support between the
    government and its people.
    Government receives taxes from the people
    which is used to perform functions of
    government and other benefits.
    Benefit-received theory.
    Basic principles of sound tax
    system

    Fiscal adequacy
    Equality or theoretical justice
    Administrative feasibility
    Fiscal adequacy

    The source of government revenue should


    be efficient to demand the needs of public
    expenditure.
    Creating new taxes or new tax machinery
    or by merely changing the rates applicable
    to existing taxes.
    Equality or theoretical justice

    The tax burden should be proportionate to


    the taxpayers ability to pay.
    Ability-to-pay principle
    Administrative feasibility

    The tax laws should be capable of


    convenient, just and effective administration.
    Each tax should be:
    Clear and plain to the taxpayer.
    Capable of uniform enforcement
    Convenient as to time, place and manner of
    payment.
    Not unduly burdensome upon or discouraging to
    business activity
    Nature of taxation

    It is inherent in sovereignty.
    Legislative in character.
    Subject to constitutional and inherent
    limitations.
    Limitations of taxation

    Inherent limitations restrictions on the


    power exists from the very nature of the
    power of taxation itself.

    Constitutional limitations restrictions


    in the exercise of the power of taxation as
    expressly provided in the Philippine
    Constitution.
    Constitutional limitations

    Due process.
    Equal protection of the laws.
    Rule of uniformity and equity in taxation.
    Non-imprisonment for non-payment of poll
    tax.
    Non-impairment of the obligations and
    contracts.
    Non-infringement of religious freedom.
    Constitutional limitations

    No appropriation for religious purposes.


    Exemption of religious, charitable or
    educational entities, non-profit cemeteries,
    and churches from taxation.
    Exemption of revenues and assets of non-
    stock, non-profit educational institutions
    and donations for educational purposes
    from taxation.
    Constitutional limitations

    Concurrence by a majority of all members


    of the Congress for the passage of a law
    granting any tax exemption.
    Power of the President to veto any
    particular item or items in a revenue or
    tariff bill.
    Non-impairment of the jurisdiction of the
    Supreme Court in tax cases.
    Inherent limitations

    Requirement that levy must be for a public


    purpose.
    Non-delegation of the legislative power to
    tax, except:
    Delegation to the President
    Delegation to local governments
    Delegation to administrative bodies
    Inherent limitations

    Exemption from taxation of government


    entities.
    International comity
    Territorial jurisdiction
    Aspects of taxation

    Levy deals with the provisions of law


    which determines:
    The person or property to be taxed
    The sum or sums to be raised
    The rate of the tax
    The time and manner of levying, receiving
    and collection the tax.
    Aspects of taxation

    Collections constituted of the provisions


    of law which prescribe the manner of
    enforcing the obligation on the part of
    those taxes to pay the demand thus
    created.

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