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Presidential
Decree
No.
1158
consolidated the internal revenue laws and
Presidential Decrees into a single TAX CODE
National Internal Revenue Code (NIRC) of
1977.
October 1985
Presidential Decree No. 1994, after
amending certain provisions of the NIRC, called
the code National Internal Revenue Code of
1986.
5. Revenue
Examiners
and
Officers;
13,14,15,16,17,18 of NIRC).
(Sec.
-Disputed assessments
-Refunds of internal revenue taxes, fees or other
charges
-Penalties imposed arising under the Tax Code or
other tax laws;
-Other matters arising under the NIRC.
of NIRC)
The
intention
is
to
ascertain the correctness of tax return, and to
determine
the
taxpayers
liability
and
compliance.
-Examine
taxpayers records;
of NIRC)
IF DENIED ACCREDITATION:
An appeal can be made to the Secretary of
Finance who shall rule within 60 days.
Failure to rule within the prescribed period
shall be deemed as APPROVAL of the
application for accreditation of the appellant
individual or general professional partnership.
Exemption:
Assessments issued by the regional
offices involving basic deficiency taxes of
P500,000 or less,
AND minor criminal violations, may be
compromised by the regional evaluation board.
Contents:
15%
ACTUAL
COLLECTIO
N
OR
1% to
14.99
%
ANNUAL
NATIONAL
BUDGET
Falls
short by
15%
Upon request
of Congress
&
In AID of
legislation
PercentageTax
es
EVAT
Esta
te
Taxe
s
Document
ary Stamp
Taxes
Excise
Tax
Donors
Tax
Income
Tax
DIRECT TAXES
Donors
Tax
Esta
te
Taxe
s
Income
Tax
INDIRECT TAXES
Percentage
Taxes
E-VAT
Documentary
Stamp Taxes
Excise
Tax
INHERENT POWERS OF
SOVEREIGN STATE
DISTINCTIONS OF TAXATION,
POLICE POWER, AND EMINENT DOMAIN
As to CONCEPT
DISTINCTIONS OF TAXATION,
POLICE POWER, AND EMINENT DOMAIN
As to PURPOSE
DISTINCTIONS OF TAXATION,
POLICE POWER, AND EMINENT DOMAIN
As to AUTHORITY
DISTINCTIONS OF TAXATION,
POLICE POWER, AND EMINENT DOMAIN
As to NECESSITY OF DELEGATION
DISTINCTIONS OF TAXATION,
POLICE POWER, AND EMINENT DOMAIN
As to PERSON AFFECTED
DISTINCTIONS OF TAXATION,
POLICE POWER, AND EMINENT DOMAIN
As to BENEFITS
DISTINCTIONS OF TAXATION,
POLICE POWER, AND EMINENT DOMAIN
As to AMOUNT OF IMPOSITION/EXACTION
DISTINCTIONS OF TAXATION,
POLICE POWER, AND EMINENT DOMAIN
As to RELATIONSHIP TO CONSTITUTION/
As to SUPERIORITY of CONTRACTS
DISTINCTIONS OF TAXATION,
POLICE POWER, AND EMINENT DOMAIN
As to LIMITATIONS
DEFINITION OF TAXATION
A power by which an Independent State,
through its law-making body, raises and
accumulates revenue from its inhabitants to
pay the necessary expenses of the
government. (51 Am. Jur. 341; 1 Cooley 72 93)
Means
Process
DEFINITION OF TAXATION
the
GENERAL RULE:
In strict sense, the power to make tax laws
CANNOT be DELEGATED.
EXEMPTIONS:
1. The power to tax can be delegated
to the
LOCAL GOVERNMENT UNITS
(LGU)
EXEMPTIONS:
2. The Congress may, by law, authorize the
President to impose tariff rates, import and export
quotas, etc, subject to the limitations and
guidelines as the Congress may impose, consistent
with the national development program of the
government.
Article VI, Section 28 (2) of the Constitution
Rehabilitatio
n of the
sugar industr
y
Socialized
Housing
Pension
deservin s to
g retiree
s
Oil Industrys
Protection
Upliftment of the
underprivileged
TERRITORIALITY
General
Rule
TERRITORIALITY
Taxation is bound to observe
INTERNATIONAL COMITY
Basis of this Rule:
Section 2, Article II of the Constitution The
Philippines renounces war as an instrument of
national policy, adopts the generally accepted
principles of international law as part of the law of
the land and adheres to the policy of peace,
equality, justice, freedom, cooperation, and amity
with all nations.
TERRITORIALITY
Taxation is bound to observe
INTERNATIONAL COMITY
Basis of this Rule:
Principle of International Law:
Sovereign Equality Among States
TERRITORIAL IN OPERATION/
TERRITORIALITY
EXCEPTION
exists
a
privity
of
relationship between the taxing State
and the object of tax.
when
there
TERRITORIAL IN OPERATION/
TERRITORIALITY
TERRITORIALITY
RULES OBSERVED in FIXING TAX SITUS
POLL/CAPITATION/COMMUNITY TAX
Poll or capitation, or community taxes are
based upon the residence of the taxpayer,
regardless of the source of income or
location of the property of the taxpayer.
TERRITORIALITY
RULES OBSERVED in FIXING TAX SITUS
TERRITORIALITY
RULES OBSERVED in FIXING TAX SITUS
PERSONAL PROPERTY
The situs of personal property, wherever it
was actually kept or located, was held to be
at the domicile of its owner, following the
age-old doctrine of mobilia sequuntur
personam.
TERRITORIALITY
RULES OBSERVED in FIXING TAX SITUS
PERSONAL PROPERTY
TERRITORIALITY
RULES OBSERVED in FIXING TAX SITUS
PERSONAL PROPERTY
EXCEPTION to the principle of
mobilia sequuntur personam.
Government
Entities
performing
PROPRIETARY
FUNCTIONS
are
generally subject to tax.
EXCEPTION to the EXECPTION:
When
the
provisions
in
their
charters or the law creating them
provides for a tax exemption.
Agencies
performing
governmental
functions are exempt from tax unless
expressly taxed.
agencies
performing
proprietary functions are subject
to
tax
unless
expressly
exempted.
WHILE,
VE
I
S
N
E
H
E
R
COMP
ns,
o
s
r
e
p
s
r
e
v
as it co
ies,
it
iv
t
c
a
,
s
e
s
busines
and
s
t
h
ig
r
,
s
n
professio
privileges.
UNLIMITED.
PLENARY
der
n
U
.
e
t
le
p
m
o
as it is c
may
R
I
B
e
h
t
,
C
SUPREME
the NIR
s to
.
ie
d
e
m
e
r
It is suprem
in
a
t
f cer
o
il
a
v
e
a
i
n
s
o
f
ar as the
of
n
io
selection o
t
c
e
ll
o
c
e
f the subjec
ure th
s
n
e
t of taxation
taxes.
is concerne
d
INHERENT
LIMITATIONS
Taxation is subject
to international
comity
Tax powe
e
r is limite
b
y
a
m
d to
territorial
Taxes
jurisdictio
r
o
f
y
l
n of
n
o
d
e
i
t
h
e State;
lev
public
tly
;
s
n
e
e
s
r
o
e
p
nh
i
pur
g
n
n
o
i
i
t
a
x
Be
ta
,
e
v
i
d;
t
e
a
t
l
a
s
i
g
leg
ele
d
e
b
Government entities may not
are generally taxexempt.
CONSTITUTIONAL LIMITATIONS
CONSTITUTIONAL LIMITATIONS
DUE PROCESS OF LAW
No person shall be deprived of life,
liberty, or property without due process
of law, nor shall any person be denied the equal
protection of the laws.
CONSTITUTIONAL LIMITATIONS
de
i
v
Pro RING
A
HE the
r
to
e
y
a
p
x
ta
CONSTITUTIONAL LIMITATIONS
EQUAL PROTECTION OF LAW
No person shall be deprived of life, liberty, or property
without
due process of
law, nor shall any
CONSTITUTIONAL LIMITATIONS
EQUAL PROTECTION OF LAW
that all persons subject to legislation shall be treated
alike under similar circumstances and conditions
both in the privileges conferred and liabilities
imposed
There is denial of equal protection of laws if
there is discrimination in the implementation of
tax laws
reasonable
classification
Must be
germane to the
purpose of the
law
pl y
p
a
t
Mus lly to
a
equ mbers
e
m
e
l
l
m
a
a
es
h
t
of
s
clas
CONSTITUTIONAL LIMITATIONS
RULE OF UNIFORMITY and EQUITY
The rule of taxation shall be uniform and
equitable. Congress shall evolve a progressive
system of taxation.
Article VI, Section 28 of the 1987 Constitution
CONSTITUTIONAL LIMITATIONS
RULE OF UNIFORMITY and EQUITY
All taxable property shall be
alike subjected to the tax
UNIFORMITY
CONSTITUTIONAL LIMITATIONS
RULE OF UNIFORMITY and EQUITY
The burden of tax falls
equally and impartially
upon all the persons
and property subject to
it.
EQUALITY
Equality in tax
ation is simila
r
to PROGRESS
IVE SYSTEM
OF TAXATION
CONSTITUTIONAL LIMITATIONS
RULE OF UNIFORMITY and EQUITY
PROGRESSIVE SYSTEM OF TAXATION
tax laws shall give emphasis on direct rather than
indirect taxes or on the ability-to-pay principle of
taxation
The tax rate INCREASES as the amount of taxable
income INCREASES
Example:
The
INDIVIDU
AL TAX
SYSTEM
5%
P500
+ 10% of the excess
over P10,000
P2,500
+ 15% of the excess
over P30,000
P8,500
+ 20% of the excess
over P70,000
P22,500
+ 25% of the excess
over P140,000
P50,000
+
30% of excess
over P250,000
P125,000 + 32% of the excess
over P500,000
CONSTITUTIONAL LIMITATIONS
REGRESSIVE SYSTEM OF TAXATION
CONSTITUTIONAL LIMITATIONS
Is a tax law adopting a regressive system
of taxation VALID?
YES. Congress shall evolve a progressive
system of taxation.-this is only a mere
directive upon Congress, not legally
enforceable. The Congress is not mandated to
prescribe, but to evolve progressive system of
taxation.
CONSTITUTIONAL LIMITATIONS
PRESIDENTs VETO POWER
Every bill passed by the Congress shall, before it
becomes a law be presented to the President. If he
approves the same, he shall sign it; otherwise, he
shall veto it and return the same with his objections
at large in its journal and proceed to reconsider it.
Article VI, Section 27 (2) of the 1987 Constitution
CONSTITUTIONAL LIMITATIONS
PRESIDENTs VETO POWER
V E TO
POWER
POCKE
T
VETO
CONSTITUTIONAL LIMITATIONS
PRESIDENTs VETO POWER
CONSTITUTIONAL LIMITATIONS
PRESIDENTs VETO POWER
If the President vetoed the bill, two-thirds
(2/3) of the members of the House are required
to make such bill to become a law.
The power of the President to remit
fines and forfeitures does not include
civil penalties regarding nonpayment of
tax and other violation of tax laws.
CONSTITUTIONAL LIMITATIONS
EXEMPTION FROM REAL PROPERTY TAXES
CONSTITUTIONAL LIMITATIONS
EXEMPTION FROM REAL PROPERTY TAXES
The Supreme Court, however, held that such tax
should be
applicable only to REAL PROPERTY
TAXES and not to transfer taxes.
exemption for the above provision
CONSTITUTIONAL LIMITATIONS
EXEMPTION FROM REAL PROPERTY TAXES
To be exempted from taxation, the real property must
be exclusively used for religious, educational and
charitable purposes.
the issue of ownership is not relevant, as long as the
real property is used exclusively for religious,
educational and charitable purposes, THEN IT SHALL
BE EXEMPTED FROM REAL ESTATE TAX.
CONSTITUTIONAL LIMITATIONS
EXEMPTION FROM REAL PROPERTY TAXES
idle lands or property used by others for other
purposes although owned by religious, educational and
charitable institutions could be subjected to real estate tax
income derived from these idle lands or property not
related to the exercise or performance of religious,
educational and charitable purposes or functions shall be
subject to internal revenue taxes---INCOME TAX.
CONSTITUTIONAL LIMITATIONS
EXEMPTION FROM INCOME TAXES
and
CUSTOM DUTIES
All revenues and assets of non-stock, non-profit
educational institutions used actually, directly and
exclusively for educational purposes shall be exempted
from taxes and duties.
Article XIV, Section 4 (3) of the 1987 Constitution
CONSTITUTIONAL LIMITATIONS
PUBLIC MONEY NOT FOR RELIGIOUS PURPOSES
No public money or property shall ever be appropriated,
applied, paid or used directly or indirectly for the use, benefit, or
support of any sect, church, denomination, sectarian , institution,
or system of religion, or for the use, benefit or support of any
priest, preacher, minister, or other religious teacher or dignitary as
such, except when such priest, preacher, minister, or
dignitary is assigned to the armed forces, or to any penal
institution, or government orphanage or leprosarium.
Article VI, Section 29 of the 1987 Constitution
CONSTITUTIONAL LIMITATIONS
PUBLIC MONEY NOT FOR RELIGIOUS PURPOSES
BASIS:
CONSTITUTIONAL LIMITATIONS
CONGRESS GRANTING TAX EXEMPTION
CONSTITUTIONAL LIMITATIONS
CONGRESS GRANTING TAX EXEMPTION
GRANT OF
TAX EXEMPTIONS
Absolute Majority
Vote of the
MEMBERS of
Congress
WITHDRAWAL OF
TAX EXEMPTIONS
CONSTITUTIONAL LIMITATIONS
SUPREME COURTS JURISDICTION
OVER TAX CASES
The Supreme Court shall have the power to review, revise,
reverse, modify or affirm on appeal or certiorari, as the
laws or the Rules of Court may provide, final judgments and
orders of lower courts in all cases involving the legality of any
tax, impost, assessment, or toll or any penalty imposed in
relation thereto.
Article VIII, Section 5 (2)(b) of the 1987 Constitution
CONSTITUTIONAL LIMITATIONS
SUPREME COURTS JURISDICTION
OVER TAX CASES
CONSTITUTIONAL LIMITATIONS
SUPREME COURTS JURISDICTION
OVER TAX CASES
CONSTITUTIONAL LIMITATIONS
NO IMPRISONMENT
FOR NON-PAYMENT of POLL TAX
CONSTITUTIONAL LIMITATIONS
NO IMPRISONMENT
FOR NON-PAYMENT of POLL TAX
POLL
TAX
COMMUNI
TY TAX
CONSTITUTIONAL LIMITATIONS
NO IMPRISONMENT
FOR NON-PAYMENT of POLL TAX
CONSTITUTIONAL LIMITATIONS
TAXES as GENERAL FUNDS of the GOVERNMENT
All money collected on any tax levied for a special
purpose shall be treated as a special fund and paid
out for such purpose only. If the purpose for which a
special und was created has been fulfilled or
abandoned, the balance, if any, shall be transferred to
the general funds of the Government.
Article VI, Section 29 (3) of the 1987 Constitution
GOVERNMENT
REVENUE PURPOSE
PRIMARY PURPOSE
Tool to
protect
TRADE
RELATION
Special duties ma
be created to
protect local
industries against
foreign
competition.
Discriminatory
Duty
Countervailing
Duty
MARKING DUTY
DUMPING DUTIES
PROSPECTIVITY
OF TAX LAWS
unless
Ex Post
FACTO LAW
IMPRESCRIPTIBILITY
OF TAXES
General Rule:
IMPRESCRIPTIBILITY
OF TAXES
LIMITATIONS in the ASSESSMENT and
COLLECTION OF TAXES as provided for
by the TAX CODE
IMPRESCRIPTIBILITY
OF TAXES
RULES in Section 203 and 222 of the NIRC
LIMITATION for ASSESSMENT
OF TAX
Within
3
YEARS
From the date
prescribed
by law to file
a return
If filed after
the date
prescribed by
law, from the
date of
ACTUAL
FILING.
IMPRESCRIPTIBILITY
OF TAXES
If no return is filed
BUT,
IMPRESCRIPTIBILITY
OF TAXES
LIMITATIONS in the ASSESSMENT and
COLLECTION OF TAXES as provided for
by other TAX LAWS
IMPRESCRIPTIBILITY
OF TAXES
Section 4, R.A. 9135
TARIFF and CUSTOMS CODE
When articles have been entered and passed free of duty
of final adjustment duties made, with subsequent delivery,
such entry and passage free from duty or settlements of
duties will, after the expiration of three (3) years, from
the date of the final payment of duties and in the absence
of fraud or protest or compliance audit pursuant to the
provisions of this Code, BE FINAL AND CONCLUSIVE
UPON ALL THE PARTIES, unless the liquidation of the
import entry was merely tentative.
IMPRESCRIPTIBILITY
OF TAXES
Section 194 R.A. 7160
LOCAL GOVERNMENT CODE
General Rule:
Local taxes, fees or charges
IMPRESCRIPTIBILITY
OF TAXES
Section 194 R.A. 7160
LOCAL GOVERNMENT CODE
Exemption:
In case of fraud, intent to evade
payment of local taxes, fees or charges
DOUBLE
TAXATION
act of the sovereign by
TAXING TWICE
-for the same purpose
-in the same year
-upon the same
property or activity of
the same person
when it should be
TAXED ONCE
-for the same purpose
and
with the same kind of
character of tax.
Through. . . .
TAX
EXEMPTION
S
Through. . . .
TAX CREDIT
Through. . . .
UPON SAME
OCCUPATION/ACTIVIT
Y
TAX imposed BY
THE STATE and
TAX imposed BY
THE LOCAL
GOVERNMENT
Subject to REAL
ESTATE TAX and
INCOME TAXT
PROHIBITED
when it should be
TAXING TWICE
TAXED ONCE
-for the same
purpose and
with the same kind
of character of tax.