Questions and Answers
What characteristic defines a direct tax?
Which of the following is an example of an ad valorem tax?
In what way do indirect taxes function?
Which type of tax is designed solely to raise revenue for government purposes?
Signup and view all the answers
What is an example of a specific tax?
Signup and view all the answers
Which of the following taxes can be classified as municipal or local?
Signup and view all the answers
What distinguishes a special or regulatory tax from other tax types?
Signup and view all the answers
Which of the following is a common example of an indirect tax?
Signup and view all the answers
What is the primary purpose of taxes?
Signup and view all the answers
Which of the following statements about license fees is correct?
Signup and view all the answers
Which statement accurately distinguishes a tax from a toll?
Signup and view all the answers
What differentiates a special assessment from a tax?
Signup and view all the answers
Which circumstance correctly indicates the legality of a business activity?
Signup and view all the answers
In terms of collectors, who is authorized to impose taxes?
Signup and view all the answers
How does the purpose of a toll differ from that of a tax?
Signup and view all the answers
Which of the following best describes the application of a special assessment?
Signup and view all the answers
What constitutes a revenue bill in the Philippines?
Signup and view all the answers
Which body is primarily responsible for initiating revenue and tariff bills in the Philippines?
Signup and view all the answers
What is the first step in the legislative process for a tax bill in the Philippines?
Signup and view all the answers
What happens during the first reading of a tax bill?
Signup and view all the answers
Which committee is responsible for considering tax proposals in the Philippine legislative process?
Signup and view all the answers
How are multiple bills of the same nature treated during the committee hearings?
Signup and view all the answers
What power does the Senate have regarding revenue bills originating in the House?
Signup and view all the answers
What role does the Executive Department play in the taxation legislation process?
Signup and view all the answers
What is considered direct double taxation?
Signup and view all the answers
Which type of property is determined by the domicile of the owner?
Signup and view all the answers
Why is direct double taxation highly discouraged?
Signup and view all the answers
Which of the following statements is true regarding indirect double taxation?
Signup and view all the answers
In the case of the Municipality of Buhi's ordinance imposing an occupation tax, what aspect validates this ordinance against claims of double taxation?
Signup and view all the answers
Where is income typically taxed?
Signup and view all the answers
Which of the following best defines intangible personal property?
Signup and view all the answers
What is an example of a situation that may lead to indirect double taxation?
Signup and view all the answers
What is a characteristic of tax exemptions?
Signup and view all the answers
What defines reciprocal tax treatments under tax reductions?
Signup and view all the answers
How do foreign tax credits generally function?
Signup and view all the answers
Under what condition are doubts regarding tax validity resolved in favor of the taxpayer?
Signup and view all the answers
Which circumstance allows for a liberal interpretation of tax exemptions in favor of the government?
Signup and view all the answers
What type of agreements may allow for lower tax rates for residents engaging in taxable transactions?
Signup and view all the answers
Exemptions traditionally favored, such as for churches, are generally treated how in tax law?
Signup and view all the answers
Which group is explicitly granted tax exemptions in special circumstances?
Signup and view all the answers
Study Notes
Types of Taxes
- Direct Taxes: The tax burden falls on the taxpayer; examples include income tax, estate tax, and donor’s tax.
- Indirect Taxes: The burden is passed on to another; examples include VAT, percentage tax, and excise tax.
Determination of Tax Amount
- Specific Tax: A fixed amount based on count, weight, or measurement; requires no assessment apart from categorization. Example: excise tax on distilled spirits.
- Ad Valorem Tax: A tax based on a percentage of property value; requires assessment by appraisers. Example: real property tax.
Purposes of Taxation
- General Revenue Taxes: Imposed to raise funds for government expenditures; examples include income tax and VAT.
- Special Regulatory Taxes: Imposed for specific social or economic purposes, not necessarily to raise revenue. Examples: sugar adjustment taxes, OPSF.
Authority Imposing Taxes
- National Taxes: Levied by the national government, including internal revenue taxes and customs duties.
- Municipal/Local Taxes: Levied for local revenue; must not exceed regulatory cost; non-payment can render the business illegal.
Comparison with Toll and Special Assessment
- Toll: Charged for the use of public property (e.g., roads); a demand of proprietorship; compensation for use.
- Special Assessment: A fee from landowners for benefits received from public improvements; applies only to land and is benefit-based.
Tax Vs. Debt
- Tax: Levied for government support; general application across various bases (income, property).
- Debt: Not compulsory and typically structured with terms for repayment.
Legislative Process for Tax Bills
- Introduced in House: All revenue and tariff bills originate in the House of Representatives; the first reading involves a simple listing of the bill’s title.
- Committee Review: The House Committee on Ways and Means considers the proposal; public hearings consolidate bills of similar nature.
Double Taxation
- Direct Double Taxation: Imposing the same tax for the same purpose by the same authority within the same period; usually discouraged.
- Indirect Double Taxation: Involves multiple taxations that are permissible in practice; considered less oppressive.
Validity of Ordinances
- Municipal ordinances imposing taxes may coexist with national taxes; as seen in the example of occupation tax imposed by local governments.
Remedies for Double Taxation
- Tax Exemptions: Provision where one tax law exempts a tax object covered by another law.
- Tax Reductions: Reciprocal agreements to lower tax rates for mutual benefits.
- Foreign Tax Credits: Credits for taxes paid to foreign entities, which reduce domestic tax liabilities.
- Tax Treaties: Agreements between countries to reduce tax rates for their residents under mutual conditions.
Interpretation of Tax Laws
- Doubts over taxpayer obligations resolved in favor of the taxpayer; doubts regarding tax exemptions favor the government unless specified otherwise by statute. Exemptions for traditional entities (like churches) are treated leniently.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
This quiz explores the concepts of direct and indirect taxes, including examples such as income tax, estate tax, and VAT. Test your knowledge on who bears the burden of various taxes and deepen your understanding of tax structure. Perfect for learners looking to grasp essential tax principles.