Nature of Taxes
NATURE OF TAXES
1. OBLIGATIONS CREATED BY LAW
-forced burdens, charges, impositions
-provide public revenues for government
- civil liability to pay taxes, unable to pay is criminal liability
(in ccriminal cases, criminal liab gives rise to civil liab)
2. PERSONAL TO THE TAXPAYER
-payment is borne by the person with tax liability
CHARACTERISTICS OF TAX
- Enforced contribution
- Legislative-congress makes tax laws
- Proportionate- ability to pay
- Payable in the form of money- property, sold to public auction
- Raising revenue- primary source of govt funds
- Pubic purpose- public benefits from tax
- Enforced on some persons, properties, rights
- Paid at regular intervals-fixed date for payment to comply with administrative feasibility
- Imposed within jurisdiction- territorial, intl comity
CLASSIFICATION OF TAXES
- Purpose
- Revenue/fiscal
- Regulatory, special, sumptuary- to achieve goals not related to raising revenue
- Compensatory- equitable distribution of wealth and income in the society
- Object/subject matter
- Personal, poll, capitation- fro residing, fixed amount
- Property- for personal and real property
- Excise- upon performance of a right or act, enjoyment of privilege or engagement in occupation (not for manufactured goods)
- Amount Determination
- Ad valorem- fixed amounts in proportion to the value of properties. Requires assessors to determine amount
- Specific- fixed amounts based on standard of measurement. Requires independent assessment
- Who bears the burden
- Direct- non transferable. Burden and liab on the same person
- Indirect- transferable. Liab on one person burden on another
- Scope or Authority collecting the Tax
- National
- Local/municipal
- Rate/ Graduation
- Proportional/flat rate- fixed percentage
- Progressive/graduated rate- inc tax rate as bracket increases
- Regressive- rate dec as bracket inc. not applied in phil. (Regressive tax system more indirect than direct taxes)
- Digressive rate- fixed rate on certain amount and lowers on amt below it.
- Mixed – with different tax rates
CHARGES AND FEES
- Penalty- punishment for violation of law. Arises from law or contracts . Regulates conduct. Govt or private person may impose it.
- Revenue- all funds or income of government
- Debt- obligation to pay or render service for a definite future period of time based on contract. Can be assigned. Cannot be imprisoned with non payment
- Toll- compensation for the use of a property. Determined by cost of improvement. DEMAND OF PROPRIETORSHIP. Pay your use.
- License Fee- to restrain and regulate business or occupation. Required for commencement of business. Illegal if unpaid. Subject to revocation. Does not include the power to tax. Non payment of tax is not illegal only ground for criminal prosecution
- Special assessment- collected by govt for reimbursing itself for certain extended benefits regarding construction of public works. Levied on land. Not personal liab
- Customs duties- tax on imported goods to protect local ones
- Subsidy- monetary aid given by the govt to an individual or private enterprise beneficial to the public
- Tariff- schedule or list of rates imposed on local goods
- Margin fee- tax on foreign exchange
TAX LAW
- Body of laws that codifies all national tax laws
- RA8424 The comprehensive tax reform of the Phil ---National Internal Revenue Code 1997/TAx code (special laws)
- RA 9337-VAT reform Law
Internal revenue Law- all laws legislated pertaining to national govt taxes. Referred to as REVENUE MEASURES
Internal revenue taxes-taxes imposed by legislative except custom duties
NATURE OF TAX LAWS
-civil in nature, neither political nor penal, not remedial laws
NIRC > Civil Code
-SUPREME COURT to interpret tax laws
RULES TO INTERPRET AND APPLY
- Tax statute must be enforced as written
-ambiguity>use rules of statutory construction to know legislative intent. Clear> impose as written
-Pari Materia interpret with reference to other tax legislations and their effect as a whole may be given consideration
2. Imposition of tax burdens is not presumed