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17) Just share of local government in national revenue which shall B. As to who bears the burden
be automatically released. 1) Direct the tax is imposed on the person who also bears the
burden thereof
18) Tax exemption of all revenues and assets of Ex. Income tax, community tax, estate tax, donors tax
(a) proprietary or cooperative educational institutions
(b) subject to limitations provided by law 2) Indirect imposed on the taxpayer who shifts the burden of the
tax to another
(Art XIV, Sec 4(3))
- levied upon transactions or activities before the articles subject
matter thereof reach the consumers to whom the burden of the tax
19) Tax exemption of grants, endowments, donations or
may ultimately be charged or shifted
contributions USED ACTUALLY, DIRECTLY and EXCLUSIVELY
Ex. VAT, specific tax, percentage tax, customs duties
for educational purposes
C. As to determination of amount
B. Indirect
1) Specific tax imposed and based on a physical unit of
measurement, as by head, number, weight, length or volume
Freedom of religion
Ex. Tax on distilled spirits, fermented liquors, cigars
Activities simply and purely for propagation of
faith are exempt (e.g. sale of bibles and religious articles 2) Ad Valorem - tax of a fixed proportion of the value of property
by non-stock, non-profit organization at minimal profit). with respect to which the tax is assessed; requires intervention of
Tax is unconstitutional if it operates as a prior assessor.
restraint on exercise of religion Ex. Real estate tax, excise tax on cars, nonessential
Income even of religious organizations from any Goods
activity conducted for profit or from any of their property,
real or personal, regardless of disposition of such income, D. As to purpose
is taxable 1) General, fiscal or revenue - imposed for the general purpose of
supporting the government
Freedom of press/expression Ex. Income tax, percentage tax
Tax that operates as a prior restraint invalid.
If fee is only for purpose of defraying cost of 2) Special or regulatory - imposed for a special purpose, to
registration and not for exercise of privilege, no violation. achieve some social or economic objectives
Mandatory Character of Constitutional Provision Ex. Protective tariffs or customs duties on imported goods intended
The established rule is that constitutional provisions are to to protect local industries
be considered as mandatory unless by express provision or
by necessary implication. E. As to authority imposing the tax
A directory provision is generally intended merely for 1) National - imposed by the national government
expediency or convenience such that to have it enforced Ex. National internal revenue taxes, custom duties
strictly may cause more harm than by disregarding it.
In case of statutory enactments, those dealing on the 2) Municipal or local - imposed by the municipal corporations or
aspects of levy and compliance are generally treated as local governments
mandatory and those that are intended merely for Ex. Real estate tax, occupation tax
administrative feasibility as directory.
F. As to graduation of rate (Three systems of taxation)
Aspects of Taxation
(Phases, Processes, Stages/Steps in Taxation) 1) Proportional - based on a fixed percentage of the amount of the
property, income or other basis to be taxed
Levy act of imposition by the legislature such
Ex. Real estate tax, VAT, percentage tax
as by its enactment of the law.
- include not only the mandate on when and how
2) Progressive or graduated - tax rate increases as the tax base
the tax is imposed but also, whenever it may be
or bracket increases
appropriate, the grant of tax exemptions, tax
Ex. Income tax, estate tax, donors tax
amnesties or tax condonations.
3) Regressive - tax rate decreases as the tax base increases
Assessment and Collection act of
administration and implementation of the tax law by the 4) Degressive - increase of rate is not proportionate to the
executive through its administrative agencies. increase of tax base
- means notice and demand for payment of a tax
liability 5) Mixed - partly progressive and partly regressive
Payment act of compliance by the taxpayer SITUS OF TAXATION - the place of taxation, the country that has
including such options, schemes or remedies as may be the power to levy and collect the tax.
legally open or available to him.
Distinction from Certain Kinds of Exactions
Classification of Taxes
A. As to subject matter of object TAX DISTINGUISHED FROM POLICE POWER
TAX EMINENT DOMAIN 2) Tax overpayment (BIRs obligation to refund or set-off arises
Purpose Raise revenue The taking of from time tax was paid)
property for public
use 3) If the case involves local government taxes
Compensation Payment of taxes Just compensation is given
TAX DISTINGUISHED FROM SPECIAL ASSESSMENT
accrue the owner
to the general of the expropriated
benefit of the property TAX SPECIAL ASSIGNMENT
citizens of the Imposed on persons, Only on land
taxing State properties, etc.
Persons Applies to all Only particular Why regardless of public Public improvement
affected persons, property property is imposed improvement that benefits the land
and comprehended Purpose Support of Contribution to cost
excises that government of public
may be improvement
subject When Regular exaction Exceptional as to
thereto imposed time and locality