G. PRINCIPLES - IDENTIFICATION

Question 1

This involves the passage of tax laws which is generally a legislative act. In the Philippines, the taxing power is exercised by the Congress

Answer 1

Levying or imposition of the tax

Question 2

The process of determining the correct amount of tax due

Answer 2

Assessment

Question 3

The act of compliance with the tax law by the taxpayer

Answer 3

Collection and payment

Question 4

Subject to inherent and constitutional limitations. It is regarded as supreme, plenary, unlimited and comprehensive

Answer 4

Power of taxation

Question 5

It is an inherent power of a sovereign state to legislate for the protection of the health, general welfare, safety, and morals of the public. It involves the power to regulate both liberty and property for the promotion of the public good.

Answer 5

Police Power

Question 6

It is the inherent power of the sovereign state to take private property for a public purpose.

Answer 6

Power of Eminent Domain

Question 7

It is a kind of progressive system of taxation where persons or properties falling under the same class should be taxed the same kind and rate of tax

Answer 7

Uniformity

Question 8

It is a kind of progressive system of taxation where the same means and methods be applied impartially to all the members of each class.

Answer 8

Equality

Question 9

This principle limits the authority of the government to effectively impose taxes on a sovereign state and its instrumentalities, as well as on its property held and activities undertaken in that capacity.

Answer 9

International Comity

Question 10

A sound tax system requires that its revenue base be capable of financing public expenditure demands.”

Answer 10

Fiscal Adequacy

Question 11

A basic principle of a sound tax system requires that the tax imposed should be proportionate to the taxpayer’s ability to pay

Answer 11

Equality or Theoretical Justice

Question 12

A basic principle of a sound tax system requires that the tax laws should be capable of convenient, just, and effective administration

Answer 12

Administrative feasibility

Question 13

This doctrine holds that a property subject to taxation gains a special benefit from public improvements, as the expenditure increases its value by at least the amount of the levy imposed

Answer 13

Special Assessment.

Question 14

It is a system involving assessment, collection, and enforcement of taxes, including the execution of judgment in all tax cases decided in favor of the Bureau of Internal Revenue by the courts.

Answer 14

Tax Administration

Question 15

The power of taxation proceeds upon the theory that the existence of government is a necessity. It is a power predicated upon necessity. The government cannot continue to perform of serving and protecting its people without means to pay its expenses.

Answer 15

Necessity Theory

Question 16

The basis of taxation is the reciprocal duties of “protectio and support” between the State and its inhabitants. The state collects taxes from the subjects of taxation in order that it may be able to perform the functions of the government

Answer 16

The benefits- Protection Theory

Question 17

An inherent power of the state where the rights affected are the property right and liberty

Answer 17

Police Power

Question 18

An inherent power of the state where the right affected is the property right

Answer 18

Taxation and Eminent Domain

Question 19

What are the principles of sound tax system?

Answer 19

1. Fiscal Adequacy
2. Administrative Feasibility
3. Theoritical Justice

Question 20

The sources of government revenue must be sufficient to meet government expenditures and other public needs

Answer 20

Fiscal Adequacy

Question 21

A good tax system must be based on the taxpayer’s ability to pay. This suggests that taxation must be progressive conformably with the constitutional mandate that congress shall evolve a progressive system of taxation

Answer 21

Theoretical Justice

Question 22

Tax laws must be capable of convenient, just, and effective administration- free from confusion and uncertainty. Thus, the tax system should have the merits of simplicity, flexibility and diversity.

Answer 22

Administrative feasibility

Question 23

Factors to consider in determining situs of taxation

Answer 23

1. Subject matter
2. Nature of the tax
3. Citizenship
4. Residence of the taxpayer

Question 24

A state cannot tax another state based on the principle of Sovereign Equality among States.

Answer 24

International Comity

Question 25

Power of taxation is purely legislative, hence the power cannot be delegated either to the executive or judicial departments.

Answer 25

Non-Delegability of the taxing power

Question 26

Tax of a fixed amount imposed upon individual, whether citizens or not, residing within a specified territory without regard to their property or the occupation in which he may be engaged.

Answer 26

Personal, Poll or Capitation Tax

Question 27

Tax imposed on property, whether real or personal, in proportion either to its value or in accordance with some other reasonable method of apportionment

Answer 27

Property tax

Question 28

Any tax which does not fall within the classification of a poll tax or a property tax. This is a tax on the exercise of certain rights and privileges.

Answer 28

Excise Tax

Question 29

This is a fixed amount based on volume, weight, or quantity of goods as measured by tools, instruments, or standards,

Answer 29

Specific Tax

Question 30

This imposition is based on the value of the property subject to tax

Answer 30

Ad valorem Tax

Question 31

Levied without a specific or pre-determined purpose

Answer 31

Fiscal/General/ Revenue Tax

Question 32

Those intended to achieve some social or economic goals

Answer 32

Regulatory/ Special/ Sumptuary Tax

Question 33

refers to the pecuniary aid directly granted by the government to an individual or private commercial enterprise deemed beneficial to the public. Not a TAX although tax may have to be imposed to pay it.

Answer 33

Subsidy

Question 34

means taxes imposed by the legislature other than duties on imports and exports

Answer 34

Internal Revenue

Question 35

A doctrine in taxation where a claim for refund which is prevented by prescription may be allowed to be used as payment for unsettled if both taxes arise from the same transaction in which overpayment is made and underpayment is due

Answer 35

Equitable Recoupment

Question 36

A doctrine in taxation wherein taxes are not subject to set-off or legal compensation because the government and the taxpayer are not mutual creditors and debtors of each other

Answer 36

Set-off taxes

Question 37

A doctrine in taxation that provides that a taxpayer suit can only be allowed if the act involves a direct and illegal disbursement of public funds derived from taxation.

Answer 37

Taxpayer's suit

Question 38

It is a grant of immunity, express or implied, to particular persons or corporations of a particular class, from a tax upon property or a excise tax which persons and corporations generally within the same taxing district, are obliged to pay,

Answer 38

Exemption from taxation

Question 39

The taxpayer uses unlawful means to evade or lessen the payment of tax

Answer 39

Evasion or dodging

Question 40

Also called tax minimization, it is the reduction or totally escaping paymet of tax through legally permissible means

Answer 40

Avoidance

Question 41

It is the transfer of tax burden to another. The imposition of tax is transferred from the statutory taxpayer to another without violating the law

Answer 41

Shifting

Question 42

3 kinds of tax shifting

Answer 42

1. forward shifting 2. backward shifting 3. onward shifting

Question 43

It is the reduction in the selling price of income producing property by an amount equal to the capitalized value of future taxes that may be paid by the purchaser

Answer 43

Capitalization

Question 44

The manufacturer aborbs the additional taxes imposed by the government without passing it to the buyers for fear of lost of its market. Instead, it increases quantity of production, thereby turning their units of production at a lower cost resulting to the transformation of the tax into a gain through the medium of production

Answer 44

Transformation

Question 45

An immunity, privilege or freedom from payment of a charge or burden to which others are obliged to pay

Answer 45

Exemption

Question 46

Similarities of the 3 inherent powers of the state (RELIC)

Answer 46

R- restriction on rights E- equivalent compensation L- legislative I- inherent C-crucial and indispensable

Question 47

Inherent Limitation of Taxation (SPINE)

Answer 47

S- situs (territoriality) P-public purpose I- int'l comity N- Non delegability E- exemption of government

Question 48

Constitutional limitation (IN DEFENSE PU)

Answer 48

I- non- imprisonment for non- payment of poll tax N - non-impairment of obligations and contracts D- due process E- equal protection clause F- freedom of religion E- exemption from RPT of churches and charitable institutions N- non stock and non- profit institutions S- freedom of speech and press E- equitability rule P- privacy of communication U- uniformity rule

Question 49

The exemption to the general rule of non-delegability (PAL)

Answer 49

P- President A- administrative agencies L- LGUs

Question 50

Characteristics of Taxation

Answer 50

1. Inherent 2. Enforced Contribution 3. Proportional 4. Generally payable in money 5. Legislative

Question 51

The power to tax includes the power to destroy

Answer 51

Marshall doctrine

Question 52

Taxation is the power to build. The power to tax is not the power to destroy, while this courts sits

Answer 52

Holmes Doctrie

Question 53

Based on the principle that the government shall not enrich itself at the expense of taxpayers

Answer 53

Doctrine of equitable recoupment

Question 54

The court cannot inquire into wisdom of a taxing act - this is a political gesture, meaning that if power belongs only to 1 brahcn of the government, the other branches cannot question the act of the other branch (XPN: LEGALITY)

Answer 54

Doctrine of judicial non-interference

Question 55

Exemption from income taxes

Answer 55

1. GSIS 2. SSS 3. PAG-IBIG 4. PHILHEALTH 5. LWDs

Question 56

Every bill passed by the congress shall embrace only one subject and shall be expressed in the title

Answer 56

Rider clause

Question 57

Requisites for a valid equal protection clause

Answer 57

1. apply to both present and future conditions 2. apply equally to all 3. must be germane/ relevant 4. based on a substantial distinction

Question 58

Manifestation of the lifeblood doctrine/theory

Answer 58

1. No estoppel against the government 2. Collection of taxes cannot be enjoined by injunction 3. taxes could not be subject of compensation or set-off 4. valid tax may result in the destruction of the taxpayer's property 5. right to select objects of taxation

Question 59

It is not legally objectionable. It extends to all cases in which there is a burden of two or more pecuniary imposition but imposed by different taxing authorities

Answer 59

Indirect duplicate taxation

Question 60

This is objectionable and prohibited because it violates the constitutional provision on uniformity and equality

Answer 60

Direct double taxation

Question 61

Source sof Tax laws (Order of priority)

Answer 61

1. Constitution 2. Tax treaties and convention with foreign countries 3. Tax laws/ Statues and judicial decisions 4. Revenue issuances

Question 62

It is imposed to regulate conduct through punishment and suppression of injurious act. May be imposed by the government or by private individuals and may arise from law or contract and may be paid in money or in kind

Answer 62

Penalty

Question 63

All items of gross income, deductions are reported in one income tax return and the applicable tax rate is applies on the tax base

Answer 63

Global system

Question 64

Different types of income are subject to different sets of graduated or flat income tax

Answer 64

Schedular system