It's all about fundamentals of taxation. I made it as a presentation of my report in Economics.

1. FUNDAMENTA
LS OF
TAXATION

2. NATURE OF TAXATION
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Taxation is a state power exercised through
the country’s legislative body.
The principle of taxation states that taxes are
collected to support the government in its
expenses and services for public welfare.
Reciprocal duties of protection and support
between the state and its citizens
The constitution also states that revenues through
taxation must only be used for government
operations and for public welfare.
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3. PURPOSE
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The purpose of taxation is to raise revenues
from all possible sources to support
government expenditures and services and to
promote the general well-being and protection
of its citizens.
Taxes safeguard newly-opened industries to
pioneering and new industries and other
enterprises.
Taxes also shield domestic producers by
levying a much higher custom duties on
imported goods.

4. CANONS OF TAXATION
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refer to the basic principles of a sound tax
system which identify the following: fiscal
adequacy, administrative feasibility, and
theoretical justice

5. Fiscal Adequacy
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Taxes collected by the Bureau of
International Revenue (BIR) must be
sufficient enough to fund the necessary
government expenditures and basic services
in a given fiscal year.
Revenues must be capable of adjusting to
variations in public expenditures.

6. Administrative feasibility
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Payment of taxes must be taxpayer-friendly.
Theoretical justice
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“ability-to-pay” principle

7. BASIS OF TAXATION
1.
2.
3.
4.
5.
6.
7.
the Constitution, the fundamental law of the land;
Statutes, laws passed by the Congress; or
Presidential Decrees;
Bureau of International Revenue rules and
regulations;
Judicial decisions on tax cases by the Supreme
Court;
Provincial, city, and municipal ordinances;
Observance of international agreements; and
Administrative rulings and opinions.

8. OBJECTS OF TAXATION
1.
2.
3.
Individuals who earn a considerable amount
of income as a worker, or as a businessman
in partnerships or corporations, including
those who inherited a property or given a
gift or donation of a considerable value;
Tangible and intangible properties, whether
personal properties (movable properties)
that can be moved or relocated or real
properties (immovable properties); and
Transactions, consumptions
interests, imports and exports; and

9. SITUS OF TAXATION
Situs is a Latin term for “place” or “location”. It
refers to the place where taxes are to be
paid.
1. Income tax
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this is paid either in the place where the
income is earned or the place of residence of
the taxpayer.
2. Real property tax
this is paid where the property is situated.

10. 3. Personal property tax
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taxes on intangible properties are paid in the
place where the property is located, similar to
real property tax.
Situs of taxation of intangible properties is the
owner’s domicile. This refers to the place of
permanent residence of the owner.
4. Business and occupation taxes
this is paid in the place where the business or
occupation is located.

11. LIMITATIONS OF TAXATION
Inherent limitations are rooted in the nature of
taxation itself. These are the limitations that
are not affected by changes in the provisions
of the constitutions.
1.
2.
The tax revenues must only be used for
public purpose.
There should be proper delegation of
legislative power to tax

12. 3.
4.
5.
Government entities are exempted.
There are territorial jurisdictions.
There is an observance of international law.

13. Constitutional limitations of taxations are those
limitations provided in the constitution. These
limitations are more subject to change when
a new constitution is introduced in the
country.
1.
Observance of due process of law
- Article III, Section 14.1 of the Constitution
says that, “No person shall be hold to
answer for a criminal offense without due
process of law.”

14. 2.
3.
4.
Equal protection of the 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
(Art. III, Sec. 1).
Uniformity and equity rule.
- The rule of taxation must be uniform and
equitable, and likewise progressive (Art. VI, Sec.
28.1)
Non-imprisonment for non-payment of poll tax
- No person shall be imprisoned for a debt or nonpayment of a poll tax (Art. III, Sec. 20
A poll tax (personal or capitation tax) is a fixed

15. 5.
No appropriation for religious purposes
- No public money or property shall be
appropriated, applied, paid or employed; directly or
indirectly, for the use, benefit or support of any
sect, church, denomination, sectarian institution or system
of religion; or of any priest, preacher, minister, 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. (Art.
VI, Sec. 29.2).
But, charitable institutions, churches and personages or
convents appurtenant thereto, mosques, nonprofit
cemeteries; and all lands, buildings, and improvementsactually, directly, and exclusively- used for
religious, charitable or educational purposes shall be
exempt from taxation. (Art. VI, Sec.28.3)

16. DOUBLE TAXATION
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Refers to an instance when an income, a
property, or a transaction was imposed with
the two or more taxes by taxing authority in
the same year.
Occurs when an object of taxation was levied
with two or more taxes from a single tax
basis.
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Direct duplicate- same income taxed twice
Indirect duplicate- taxes that are paid by the
same individual o corporation based on two or

17. THE QUESTION OF GOVERNMENT TAXING ITSELF
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The government may be taxed if it derives
profit in the exercise of its proprietary
capacity, and not when the revenues were
gained from the exercise of governmental
responsibility.
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The government functions in its governmental
capacity when it serves the people and delivers
basic services to them.
The government acts in its proprietary capacity
when it functions for profit.

18. AVOIDING TAXATION
These are the other concepts related to taxation in
terms of avoidance or nonpayment:
Shifting
- This is the passing on of the tax burden from
one person to another.
Capitalization
- This is done by reducing the price of a taxable
product or service to lower the tax that will be
imposed on its consumption.

19. Tax Avoidance
- refers to the availing by the taxpayer of legally
allowable means in reducing or minimizing the tax due
on certain properties, items, and services
- “tax minimization”
Tax Evasion
- refers to the use by the taxpayer of illegal means in
escaping, defeating or lessening the tax due.
- “tax dodging”
Tax exemption
- the bestowal of immunity by the taxing authority on a
taxpayer from the obligation of tax payment.