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Taxation is solely based on the privilege of enjoying government services.
Taxation is solely based on the privilege of enjoying government services.
False
The obligation to pay taxes is a contractual liability.
The obligation to pay taxes is a contractual liability.
False
Taxes can be levied based on an individual's ability to pay.
Taxes can be levied based on an individual's ability to pay.
True
The Necessity Theory posits that taxation is a burden necessary for the preservation of the State’s sovereignty.
The Necessity Theory posits that taxation is a burden necessary for the preservation of the State’s sovereignty.
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Public purpose is not a requirement for the levying of taxes.
Public purpose is not a requirement for the levying of taxes.
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The Benefits-Protection Theory states that only those who pay taxes receive benefits from the government.
The Benefits-Protection Theory states that only those who pay taxes receive benefits from the government.
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Enforcement of tax payment is solely at the discretion of individual citizens.
Enforcement of tax payment is solely at the discretion of individual citizens.
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Taxes are generally payable in commodities rather than money.
Taxes are generally payable in commodities rather than money.
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The power of taxation can only be exercised if it is explicitly mentioned in the Constitution.
The power of taxation can only be exercised if it is explicitly mentioned in the Constitution.
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Legislative power to tax is subject to both constitutional and inherent limitations.
Legislative power to tax is subject to both constitutional and inherent limitations.
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The levy process involves determining the persons and properties to be taxed and the amount to be raised.
The levy process involves determining the persons and properties to be taxed and the amount to be raised.
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Tax exemptions can be granted at the discretion of legislative power.
Tax exemptions can be granted at the discretion of legislative power.
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The primary objective of taxation is to reduce social inequality.
The primary objective of taxation is to reduce social inequality.
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The collection of taxes is solely the responsibility of the federal government.
The collection of taxes is solely the responsibility of the federal government.
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The Lifeblood Theory suggests that taxation is essential for the state's survival and function.
The Lifeblood Theory suggests that taxation is essential for the state's survival and function.
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Non-revenue objectives of taxation do not include promotion of general welfare.
Non-revenue objectives of taxation do not include promotion of general welfare.
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Protective tariffs and customs duties are examples of __________ policy.
Protective tariffs and customs duties are examples of __________ policy.
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The principle of theoretical justice in taxation implies that individuals with lesser ability to pay should bear a greater tax burden.
The principle of theoretical justice in taxation implies that individuals with lesser ability to pay should bear a greater tax burden.
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Indirect taxes allow the burden to be shifted from the original taxpayer to another individual.
Indirect taxes allow the burden to be shifted from the original taxpayer to another individual.
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A community tax is an example of a specific tax imposed per unit.
A community tax is an example of a specific tax imposed per unit.
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Income tax is categorized as an excise tax.
Income tax is categorized as an excise tax.
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To meet the fiscal adequacy principle, tax revenue must neither exceed nor fall short of public expenditure needs.
To meet the fiscal adequacy principle, tax revenue must neither exceed nor fall short of public expenditure needs.
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Regulatory taxes are primarily designed to collect revenue for government needs.
Regulatory taxes are primarily designed to collect revenue for government needs.
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The 1987 Constitution mandates taxation to be equitable and uniform, adhering to the ability-to-pay principle.
The 1987 Constitution mandates taxation to be equitable and uniform, adhering to the ability-to-pay principle.
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A progressive tax increases in rate as the income amount to be taxed decreases.
A progressive tax increases in rate as the income amount to be taxed decreases.
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Real property tax is an example of a regressive tax.
Real property tax is an example of a regressive tax.
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Municipal or local taxes can include professional taxes imposed by local government units.
Municipal or local taxes can include professional taxes imposed by local government units.
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A toll is primarily intended to raise revenue and can be imposed by any individual or entity.
A toll is primarily intended to raise revenue and can be imposed by any individual or entity.
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The estate tax and donor’s tax have a flat rate of 6% as set by the TRAIN Law.
The estate tax and donor’s tax have a flat rate of 6% as set by the TRAIN Law.
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National taxes are imposed by local government units.
National taxes are imposed by local government units.
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Special assessments or levies apply only to land that benefits from public works.
Special assessments or levies apply only to land that benefits from public works.
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Taxes generally have a limit as to the amount imposed, while tolls do not.
Taxes generally have a limit as to the amount imposed, while tolls do not.
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A tax is imposed on the right to exercise privilege.
A tax is imposed on the right to exercise privilege.
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License/permit fees are primarily intended for regulation rather than revenue generation.
License/permit fees are primarily intended for regulation rather than revenue generation.
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Imprisonment may occur for non-payment of debt.
Imprisonment may occur for non-payment of debt.
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The primary purpose of a tax is always to generate revenue.
The primary purpose of a tax is always to generate revenue.
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License fees can be assigned to another party just like debts.
License fees can be assigned to another party just like debts.
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Non-payment of a fee can render the business or act illegal.
Non-payment of a fee can render the business or act illegal.
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A tax generally has a limit on the amount payable.
A tax generally has a limit on the amount payable.
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Both taxes and license/permit fees can be considered the same if their primary purposes overlap.
Both taxes and license/permit fees can be considered the same if their primary purposes overlap.
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Study Notes
Taxation: Concepts, Nature, and Characteristics
- Taxation is the act of imposing a tax; a process by which the government raises revenue to cover expenses; and the inherent power of the state to demand contributions for public purposes.
- Taxes are enforced, proportional, pecuniary contributions levied by the state for government support and public needs. They are levied on persons, property, acts, transactions, rights, or privileges.
- Key characteristics of taxes include being levied by the law-making body, enforced, generally payable in money, proportionate, levied for public purposes, and levied by the state with jurisdiction.
Theories and Basis of Taxation
- Necessity Theory: Taxation is a necessary burden to preserve state sovereignty and provide services.
- Benefits-Protection Theory: Citizens enjoy benefits from living in an organized society, justifying tax contributions; benefits aren't necessarily commensurate with the tax paid.
- Lifeblood Theory: Taxes are vital for the government's functioning.
Nature of the Power of Taxation
- Inherent in sovereignty: Exists independently of constitutional provisions, which act as limitations.
- Legislative in character: Power resides with the law-making body.
- Subject to constitutional and inherent limitations: These come from the constitution and nature of the taxing power itself.
Aspects of the Taxation System
- Levy: Determining who, what, and how much is taxed.
- Collection/Tax Administration: Enforcing tax obligations.
Legislative Power to Tax
- Discretion over subjects of taxation, purposes, amount/rate, apportionment, situs (location), and method of collection.
- Can grant tax exemptions or condonations and provide administrative and judicial remedies.
Objectives of Taxation
- Revenue Objective: Funding government activities.
- Non-Revenue Objectives: Promoting general welfare, regulation, reducing social inequality, encouraging economic growth, and protectionism.
Sound Tax System
- Fiscal Adequacy: Sufficient revenue to meet government needs.
- Administrative Feasibility: Efficient and just enforcement at reasonable cost.
- Theoretical Justice/Equality: Tax burden proportional to ability to pay (ability-to-pay principle). Requires equitable and uniform taxation (per the 1987 Constitution).
Classifications of Taxes
- As to Subject Matter: Personal/capitation (e.g., community tax), property (e.g., real property tax), excise/privilege (e.g., income tax, VAT, estate tax).
- As to Burden: Direct (incidence and impact on one person, e.g., income tax), indirect (incidence on one, burden shifted to another, e.g., VAT).
- As to Purpose: General/fiscal (raise revenue), special/regulatory (achieve social/economic goals).
- As to Measure of Application: Specific (per unit/weight), ad valorem (value-based).
- As to Rate: Progressive (rate increases with tax base), regressive (rate decreases with tax base), proportional/flat/uniform (same rate for all).
- As to Scope: National (imposed by national government), municipal/local (imposed by local government units).
Distinctions between Taxes and Other Impositions
- Tax vs. Toll: Tax is a demand of sovereignty; toll is a demand for the use of property.
- Tax vs. Penalty: Tax is for revenue; penalty is for regulating conduct.
- Tax vs. Special Assessments: Tax is imposed on persons and property; special assessments are levied on land benefited by public works, and are not a personal liability.
- Tax vs. License/Permit Fee: Tax is enforced contribution for public expenses; license fees are for regulation and limited to inspection costs.
- Tax vs. Debt: Tax is based on law; debt is based on contract. Tax generally cannot be assigned and has specific sanctions for non-payment.
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Description
Test your understanding of the key concepts, nature, and characteristics of taxation. Explore theories such as Necessity, Benefits-Protection, and Lifeblood to see how they underpin the rationale for tax systems. This quiz will challenge your knowledge of the fundamental principles of taxation.
