2. As to Subject Matter
O A. personal, poll or capitation- tax of a fixed amount on
individuals residing within a specified territory, without
regard to their property, occupation or business.
Ex. Community tax (basic)
O B. property- imposed on property, real or personal, in
proportion to its value, or in accordance with some
reasonable method or apportionment.
Ex. Real estate Tax
O C. Excise- imposed upon the performance of an act, the
enjoyment of a privilege, or the engaging in an occupation,
profession or business.
Ex. Income tax, VAT, Estate Tax, Donor’s Tax
3. As to Who Bears the Burden
O a. Direct- the tax is imposed on the person
who also bears the burden thereof
Ex. Income tax, community tax, estate tax
O b. Indirect – imposed on the taxpayer who
shifts the burden of the tax to another, Ex.
VAT, customs duties.
4. As to Determination of Account
O a. Specific Tax– imposed and based on a physical
unit of measurement as by head number, weight,
length or volume.
Ex. Tax on distilled spirits, fermented liquors, cigars
O b. Ad Valorem Tax- of a fixed proportion of the
value of the property with respect to which the tax is
assessed.
Ex. Real estate tax, excise tax on cars, non essential
goods.
5. As to Purpose
O A. General, fiscal, or revenue- imposed for the general
purpose of supporting the government.
Ex. Income tax, percentage tax
O B. Special or regulatory- imposed for a special
purpose, to achieve some social or economic objective.
Ex. Protective tariffs or custom duties on imported goods
intended to protect local industries
6. As to Scope
Oa. National- imposed by the national
government ex. NIRC, custom duties
Ob. Municipal or Local- imposed by
municipal corporations or local
governments ex. Real estate tax,
7. Distinction of Tax From Other
Terms
1. Tax distinguished from toll
o a. A tax is a demand of sovereignty, while toll is a
demand for proprietorship
o b. A tax is paid for the use of the government’s
property, while a toll is paid for the use of another’s
property.
o c. A tax may be imposed by the government only,
while the toll is enforced by the government or a
private individual or entity.
8. Distinction of Tax From Other
Terms
2. Tax distinguished from Penalty
o a. A tax is intended to raise revenue, while
a penalty is designed to regulate conduct.
o b. A tax may be imposed by the
government only, while a penalty may be
imposed by the government of a private
individual .
9. Distinction of Tax From Other
Terms
3. Tax distinguished from Debt.
O a. A tax is based on law, while the debt is based
on contract.
O b. A tax may not be assignable, while a debt is
assignable.
O c. tax is generally payable in cash, while debt is
payable in cash or in kind.
O d. person may be imprisoned for a non-payment
of taxes, but any person may not be imprisoned
for non-payment of debt.
10. Distinction of Tax From Other
Terms
4. Tax distinguished from other terms
a. Revenue – this refers to all the funds or
income derived by the government whether
form tax or any other source in another sense.
b. Internal Revenue - it refers to taxes imposed
by the legislature other than duties on imports
and exports.
c. Customs Duties(simple duties) - they are
taxes imposed on goods exported into a
country.
11. Entities Exempted from
Taxation
1. Religious institution (church, mosques,
and parsonages.
2. Charitable institution
3. Non-profit, non-stick educational
institution
4. Non-profit cemeteries
5. Government institution
6. Foreign diplomats(by virtue of treaty ,
Art. XV, Sec.3&4,1987 Constitution, Art.
VII, Sec.28,Par1)
12. Situs of Taxation
O Situs is Latin term which means “situation”, ”location”,
or “place”. Its literal meaning refers to place of taxation. In
real property, the rule is “tax is imposed to place or
state(city, municipality, or province) where the property is
located, subject to be taxed, has a jurisdiction over said
property.
O In movable property taxation, the rule is , “mobilia
sequnter personan” , a Latin term or phase which means
“ movables follow the law person”(back’s Law Dictionary ,
5th edition).
O It gives us an idea that the place or state (city, municipality
or province , wherein your property is located has a
jurisdiction in imposing the payment for property tax.
13. Concept of Double Taxation
O The two(2) concepts of double taxation are :
1. Direct duplicate
2. Indirect duplicated
O Direct duplicate has the following elements :
a. Taxing twice
b. By the same taxing authority
c. Within the same purpose
d. For the same purpose
e. In the same taxable period
f. Involving the same period
14. Forms of Escape from Taxation
There are six(6) forms of escape from taxation:
1. Shifting- is one way of passing the burden of tax from
one person to another (black’s Law Dictionary, supra)
O Kinds of shifting
a. Forward shifting – occurs when the burden of the tax
transferred from a factor of production to the factor of
distribution.
b. Backward shifting- occurs when the burden of tax is
transferred from a factor the consumer to the producer
or manufacturer.
c. Onward shifting – occurs when tax is shifted to two or
more times either forward or backward.
15. Forms of Escape from Taxation
2. Capitalization- this refers to the reduction in the price
of the taxed object to the capitalized value of future
taxes which the purchaser expects to be called upon to
pay.
3. Transformation- occurs when the manufacturer or
producer upon whom tax has been imposed pays the
tax and endeavour to “recoup” himself/herself by
improving his/her process of production.
4. Tax Evasion- is the practice by the taxpayers through
illegal or fraudulent means to defeat or lessen the
amount for tax. This is known as “tax dodging”.
16. Forms of Escape from Taxation
5. Tax Avoidance- is the exploitation by the taxpayers of
legally permissible methods in order to avoid or reduce tax
ability. This known as “tax minimization”.
6. Tax Exemption- is the grant of immunity or freedom from a
financial charge, obligation, or burden to which others are
subjected.
Grounds for Exemption
a. Contract, wherein the government is the contracting party
b. Public Policy
c. Reciprocity
