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Reviewer On Introduction To Taxation

Taxation is the state's power to collect compulsory contributions for public services, governed by the Philippine Constitution and the National Internal Revenue Code. Its objectives include revenue generation, regulation, redistribution, and representation, with principles of fiscal adequacy, equality, and administrative feasibility. Common taxes in the Philippines include income tax, VAT, and excise tax, with specific filing deadlines and tips for compliance.

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11 views3 pages

Reviewer On Introduction To Taxation

Taxation is the state's power to collect compulsory contributions for public services, governed by the Philippine Constitution and the National Internal Revenue Code. Its objectives include revenue generation, regulation, redistribution, and representation, with principles of fiscal adequacy, equality, and administrative feasibility. Common taxes in the Philippines include income tax, VAT, and excise tax, with specific filing deadlines and tips for compliance.

Uploaded by

rmarielle24
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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📘 Reviewer on Introduction to Taxation

🧾 What is Taxation?

Taxation is the inherent power of the state to demand compulsory contributions from individuals and
entities to fund public services and government operations.

🇵🇭 Legal Basis (Philippines)

 Article VI, Section 28 of the 1987 Philippine Constitution

 National Internal Revenue Code (NIRC) governs tax laws

🎯 Objectives of Taxation

1. Revenue – main source of government funds

2. Regulation – controls certain behaviors (e.g., sin taxes)

3. Redistribution – promotes social justice and equality

4. Representation – encourages accountability (linked to the idea of “no taxation without


representation”)

🏛️Basic Taxation Principles

Principle Description

Fiscal Adequacy Sufficient revenue to fund government needs

Equality/Equity Based on ability to pay

Administrative Feasibility Easy to collect and enforce

🧍‍♂️Who Pays Taxes?

 Individuals (citizens and resident aliens)

 Corporations and other juridical entities

 Self-employed and professionals

 Estates and trusts


📂 Types of Taxes (Philippines)

A. As to Authority

Type Example

National Income tax, VAT, Excise tax (BIR)

Local Real property tax, Community tax (LGUs)

B. As to Subject/Person

Type Description

Personal/Direct Based on income/capacity (e.g., income tax)

Indirect Shifted to others (e.g., VAT, excise)

C. As to Purpose

Type Description

Fiscal For government revenue

Regulatory To control behavior (e.g., cigarette taxes)

💸 Common Taxes in the Philippines

Tax Type Who Pays Rate/Info

Income Tax Individuals & corporations Graduated or fixed

Value Added Tax (VAT) Businesses selling goods/services 12% on gross sales

Percentage Tax Small businesses (non-VAT) 3% (can change with laws)

Excise Tax On specific goods (e.g., alcohol, fuel) Per unit or % basis

Withholding Tax Collected at source (e.g., salary) Final or creditable

Real Property Tax Real estate owners Based on assessed value

📅 Important Filing Dates (PH)

Tax Type Deadline

Income Tax Return (ITR) April 15 (annually)


Tax Type Deadline

VAT returns Monthly/Quarterly

Withholding Tax Monthly/Quarterly

🧠 Quick Tips

 BIR = Bureau of Internal Revenue (national tax agency)

 LGU = Local Government Unit (collects local taxes)

 Tax evasion = illegal, Tax avoidance = legal

 Keep receipts and file on time to avoid penalties

📝 Practice Questions

1. What is the main purpose of taxation?

2. Differentiate between direct and indirect taxes.

3. What are the three basic principles of a sound tax system?

4. Give three examples of national taxes and who collects them.

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