Taxation

Basic Principles of Tax System
Classification of Taxes
Forms of Taxes
Some fees, charges and burdens collected by the
Bureau of Customs
Examples of Direct Taxes
Examples of Indirect Taxes

Basic Principles of Tax System
1. Fiscal Adequacy
which means that sources of revenue be sufficient to meet
the demands of public expenditures
2. Equality or Theoretical Justice
which means that the burden should be in proportion to the
taxpayer’s ability to pay
3. Administrative Feasibility
which means that the tax laws should be capable of
convenient, just effective and effective administration

 AS TO SUBJECT MATTER
 AS TO WHO BEARS THE BURDEN
 AS TO DETERMINATION OF AMOUNT

 AS TO SUBJECT MATTER
1. Personal, or poll capitation tax
- is a tax of a fixed important on persons residing within a specific territory,
whether citizens not , without regard to their priority, occupation or
business in which they maybe engaged.
2. Property Tax
– is a tax imposed on property, whether real or proportional and
proportion either to its value or in accordance with some reasonable method of
appointment. Ex. Residence Tax
3. Excise Tax
- is a charge imposed upon the performance of an act, enjoyment of a
privilage, or the engaging in a occupation, professions or bussiness
Ex. VAT

 AS TO WHO BEARS THE BURDEN
4. Direct Tax
-is a tax which is demanded from the person who also shoulders the
burden of the tax : thus it is the tax for which the taxpayer is directly
liable or which he cannot shift to another.
Ex. Income Tax
5. Indirect Tax
-refers to a tax imposed upon goods before they reached the consumer
who ultimately pays for it not as tax but as part of purchased price.
Ex. VAT

 AS TO DETERMINATION OF AMOUNT
6. Specific Tax
- is a tax of a fixed amount imposed by the head or number,
or by some standard of weight or measurement: it requires no assessment other
than listing or classification of the objects to be taxed.
Ex. Taxes on wines
7. Ad Valorem (According to Value)
-refers to tax of a fixed proportion of the value of the property with respect to
which tax is assessed. Consequently, it requires the intervention of assessors or
appraisers estimate the value of the property before amount due from
taxpayer can be determine.
Ex. Taxes on cigarettes

1. Capital Gains Tax
A tax charged on capital gains, the profit realized on the
sale of an asset that was purchased at a lower price. The
most common capital gains are realized from the sale of
stocks, bonds, precious metals and property.
2. Corporation Tax
Refers to a tax levied by various jurisdictions on the
profits made by companies or associations.
3. Excises
Sometimes called an excise duty, are taxes paid when
purchases are made on a specific good, such as gasoline

4. Income Tax
A tax levied on the financial income of persons,
corporations, or other legal entities.
5. Inheritance Tax
Inheritance tax, estate tax and death duty are the names
given to various taxes which arise on the death of an
individual.
6. Poll Tax
A poll tax, head tax, or capitation is a tax of a uniform,
fixed amount per individual (as opposed to a percentage of
income).
7. Property Tax
Property tax, millage tax is an ad valorem tax that an
owner of real estate or other property pays on the value of
the property being taxed.

8. Retirement Tax
Some countries with social security systems, which
provide income to retired workers, fund those systems with
specific dedicated taxes.
9. Sales Tax
A state or locality imposed percentage tax at the
point of purchase for certain goods and services
10. Tariffs
A tariff is a tax on foreign goods upon importation.
11. Toll
A toll is a tax or fee charged to travel via a road, bridge,
tunnel or other route

12. Transfer Tax
In a narrow legal sense, a transfer tax is essentially a
transaction fee (often relatively small in relation to the
value of property) imposed on the transfer of title to
property
13. Value Added Tax
A tax on exchanges. It is levied on the value added that
results from each exchange
14. Wealth (net worth) Tax
Because of the broad term “wealth”, property tax,
capital transfer taxes (inheritance tax, estate tax, gift tax),
endowment tax and capital gains taxes are sometimes
referred to as “wealth taxes”.

Direct taxes are taxes that are imposed directly on the
taxpayer. The burden of these taxes are not in general passed on to
others. They are levied based on the ability-to-pay principle.
Personal Income Tax (PIT) is a direct tax levied on income of a
person. A person means an individual, an ordinary partnership, a non-juristic
body of person and an undivided estate. In general, a person liable to PIT has
to compute his tax liability, file tax return and pay tax, if any, accordingly on a
calendar year basis.

An assessment levied by a government on the profits of a company.
The rate of corporate income tax paid by a business varies between countries,
although since corporations are legal entities distinct from their owners
and operators, they are typically taxed as if they were people.
Any kind of tax that is levied on the transfer of official documents or
other property. Transfer tax is paid by the seller of the property.
Transfer taxes in the Philippines are of two kinds:

A federal tax applied to an individual giving anything of value
to another person. For something to be considered a gift, the receiving
party cannot pay the giver full value for the gift, but may pay an amount
less than its full value. It is the giver of the gift who is required to pay the
gift tax. The receiver of the gift may pay the gift tax, or a percentage of it,
on the giver's behalf in the event that the giver has exceeded his/her
annual personal gift tax deduction limit.
The following are generally excluded from gift tax:
1. Gifts to one's spouse.
2. Gifts to a political organization for use by the political organization.
3. Gifts that are valued at less than the annual gift tax exclusion for a
given year.
4. Medical and educational expenses - payments made by a donor to a
person or organization such as a college, doctor or hospital.

is a tax on the right of the deceased person to transmit his/her
estate to his/her lawful heirs and beneficiaries at the time of death and
on certain transfers, which are made by law as equivalent to
testamentary disposition. It is not a tax on property. It is a tax imposed
on the privilege of transmitting property upon the death of the owner.
The Estate Tax is based on the laws in force at the time of death
notwithstanding the postponement of the actual possession or
enjoyment of the estate by the beneficiary.

is a tax collected by an intermediary such as a retail
store from the person who bears the ultimate
economic burden of the tax such as the consumer.
The intermediary later files a tax return and forwards
the tax proceeds to government with the return. In
this sense, the term indirect tax is contrasted with
a direct tax which is collected directly by government
from the persons legal or natural on which it is
imposed.

A sales tax is a tax paid to a governing body
for the sales of certain goods and services. Usually
laws allow (or require) the seller to collect funds for
the tax from the consumer at the point of purchase.
Laws may allow sellers to itemize the tax separately
from the price of the goods or services, or require it
to be included in the price (tax-inclusive). The tax
amount is usually calculated by applying
a percentage rate to the taxable price of a sale.

Other types of sales taxes, or similar taxes, include:
•Manufacturers' sales tax: a tax on sales of tangible personal
property by manufacturers and producers
•Wholesale sales tax: a tax on sales of wholesale of tangible
personal property when in a form packaged and labeled ready for
shipment or delivery to final users and consumers.
•Retail sales tax: a tax on sales of retail of tangible personal
property to final consumers and industrial users
•Gross receipts taxes, levied on all sales of a business. This tax has
been criticized for its "cascading" or "pyramiding" effect, in which
an item is taxed more than once as it makes its way from production
to final retail sale.
Excise taxes, applied to a narrow range of products, such as
gasoline or alcohol, usually imposed on the producer or wholesaler
rather than the retail seller

•Use tax, imposed directly on the consumer of goods purchased without
sales tax, generally items purchased from a vendor who is not under the
jurisdiction of the taxing authority (e.g., a vendor in another state). Use
taxes are commonly imposed by states with a sales tax, but are usually
only enforced for large items such as automobiles and boats.[
•Securities turnover excise tax, a tax on the trade of securities.[]
•Value added taxes, in which tax is charged on all sales, thus avoiding
the need for a system of resale certificates. Tax cascading is avoided by
applying the tax only to the difference ("value added") between the price
paid by the first purchaser and the price paid by each subsequent
purchaser of the same item.]
•FairTax, a proposed federal sales tax, intended to replace the U.S.
federal income tax.[
•Turnover tax, similar to a sales tax, but applied to intermediate and
possibly capital goods as an indirect tax]
Most countries in the world have sales taxes or value-added taxes at all
or sever

Taxation

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