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Topic 210 INTRODUCTION TO PUBLIC FINANCE & GENERAL PRINCIPLES OF TAXATION TMD General Course for
Topic 210 INTRODUCTION TO PUBLIC FINANCE & GENERAL PRINCIPLES OF TAXATION TMD General Course for

Topic 210

Topic 210 INTRODUCTION TO PUBLIC FINANCE & GENERAL PRINCIPLES OF TAXATION TMD General Course for Revenue
Topic 210 INTRODUCTION TO PUBLIC FINANCE & GENERAL PRINCIPLES OF TAXATION TMD General Course for Revenue
INTRODUCTION TO PUBLIC FINANCE & GENERAL PRINCIPLES OF TAXATION TMD
INTRODUCTION TO
PUBLIC FINANCE &
GENERAL PRINCIPLES
OF TAXATION
TMD

General Course for Revenue Officers

GPT 210 Slide 1

TOPIC OUTLINE Public Finance (an Overview) Fundamental Concepts of Taxation Theory and Basis of Taxation
TOPIC OUTLINE Public Finance (an Overview) Fundamental Concepts of Taxation Theory and Basis of Taxation

TOPIC

OUTLINE

TOPIC OUTLINE Public Finance (an Overview) Fundamental Concepts of Taxation Theory and Basis of Taxation Purpose
TOPIC OUTLINE Public Finance (an Overview) Fundamental Concepts of Taxation Theory and Basis of Taxation Purpose

Public Finance (an Overview) Fundamental Concepts of Taxation Theory and Basis of Taxation Purpose of Taxation Essential Characteristics of Taxes Basic Principles of a Sound Tax System Definition, Similarities & Differences of Various Taxation Terms Classification of Taxes

General Course for Revenue Officers

TMD

GPT 210 Slide 2

TOPIC OUTLINE Powers of Taxation Nature, Construction & Sources of Tax Laws Situs, Scope &
TOPIC OUTLINE Powers of Taxation Nature, Construction & Sources of Tax Laws Situs, Scope &

TOPIC

OUTLINE

TOPIC OUTLINE Powers of Taxation Nature, Construction & Sources of Tax Laws Situs, Scope & Aspects
TOPIC OUTLINE Powers of Taxation Nature, Construction & Sources of Tax Laws Situs, Scope & Aspects

Powers of Taxation Nature, Construction & Sources of Tax Laws Situs, Scope & Aspects of Taxation Tax Exemptions Organizational Framework of the BIR Functions of the BIR

Powers & Duties of the CIR Definition, Classification, Nature, Payment

& Effect

of

Assessment

General Course for Revenue Officers

TMD

GPT 210 Slide 3

TOPIC OBJECTIVES ✔ Differentiate taxation from taxes; ✔ Enumerate the purposes of taxation; ✔ Identify
TOPIC OBJECTIVES ✔ Differentiate taxation from taxes; ✔ Enumerate the purposes of taxation; ✔ Identify

TOPIC

OBJECTIVES

TOPIC OBJECTIVES ✔ Differentiate taxation from taxes; ✔ Enumerate the purposes of taxation; ✔ Identify the
TOPIC OBJECTIVES ✔ Differentiate taxation from taxes; ✔ Enumerate the purposes of taxation; ✔ Identify the

Differentiate taxation from taxes;

Enumerate the purposes of taxation;

Identify the theory and basis of taxation;

Identify the essential characteristics and classification of taxes;

Distinguish taxes from other taxation terms;

Distinguish the similarities and differences among taxation, eminent domain and police power;

Analyze the basic principles of a sound tax system;

General Course for Revenue Officers

TMD

GPT 210 Slide 4

TOPIC OBJECTIVES ✔ Differentiate inherent from constitutional limitations on the power of taxation; ✔ Identify
TOPIC OBJECTIVES ✔ Differentiate inherent from constitutional limitations on the power of taxation; ✔ Identify

TOPIC

OBJECTIVES

TOPIC OBJECTIVES ✔ Differentiate inherent from constitutional limitations on the power of taxation; ✔ Identify the
TOPIC OBJECTIVES ✔ Differentiate inherent from constitutional limitations on the power of taxation; ✔ Identify the

Differentiate inherent from constitutional limitations on the power of taxation;

Identify the different situs of taxation and clarify concepts of double taxation;

Identify the nature, construction, application and sources of tax laws;

Enumerate the nature, rationale, grounds and sources of tax exemptions;

Know the scope of taxation;

Identify the different aspects of taxation; and

Differentiate tax evasion and tax avoidance.

General Course for Revenue Officers

TMD

GPT 210 Slide 5

Public Finance (An Overview) Public Finance economics revenues that and is branch of with the
Public Finance (An Overview) Public Finance economics revenues that and is branch of with the

Public Finance (An Overview)

Public Finance (An Overview) Public Finance economics revenues that and is branch of with the of
Public Finance (An Overview) Public Finance economics revenues that and is branch of with the of

Public

Finance

economics

revenues

that

and

is

branch

of

with the

of

a

deals

expenditures

government and their impact on

the economy

General Course for Revenue Officers

TMD

GPT 210 Slide 6

Public Finance (An Overview) PUBLIC FINANCE is the raising of revenues through the imposition of
Public Finance (An Overview) PUBLIC FINANCE is the raising of revenues through the imposition of

Public Finance (An Overview)

Public Finance (An Overview) PUBLIC FINANCE is the raising of revenues through the imposition of taxes.
Public Finance (An Overview) PUBLIC FINANCE is the raising of revenues through the imposition of taxes.

PUBLIC FINANCE is the raising of

revenues through the imposition of

taxes.

General Course for Revenue Officers

TMD

GPT 210 Slide 7

Components of Fiscal Policy Government revenue policy - how the government gets its funds; Government
Components of Fiscal Policy Government revenue policy - how the government gets its funds; Government

Components of Fiscal Policy

Components of Fiscal Policy Government revenue policy - how the government gets its funds; Government expenditures
Components of Fiscal Policy Government revenue policy - how the government gets its funds; Government expenditures

Government revenue policy - how the government gets its funds;

Government expenditures policy -

how

it

allocates

its

revenue

among

different uses; and

 

Debt management policy - how it manages the public debt.

General Course for Revenue Officers

TMD

GPT 210 Slide 8

Sources of Government Revenues & Expenditures Revenues Tax revenues - whether direct or indirect tax
Sources of Government Revenues & Expenditures Revenues Tax revenues - whether direct or indirect tax

Sources of Government Revenues & Expenditures

Sources of Government Revenues & Expenditures Revenues Tax revenues - whether direct or indirect tax Capital
Sources of Government Revenues & Expenditures Revenues Tax revenues - whether direct or indirect tax Capital

Revenues

Tax revenues - whether direct or indirect tax Capital revenues - proceeds from sales of fixed capital asset or scraps like sales of public bonds, building and other structures. Extraordinary income - repayment of loans and advances made by government corporation and local governments. Public borrowing - proceeds of repayable obligations generally with interest from domestic and foreign creditors of government. Grants - voluntary contributions and aids given to the government for its operation on specific purpose.

General Course for Revenue Officers

TMD

GPT 210 Slide 9

Sources of Government Revenues & Expenditures Expenditures Recurrent expenditures - refer to the day-to-day cost
Sources of Government Revenues & Expenditures Expenditures Recurrent expenditures - refer to the day-to-day cost

Sources of Government Revenues & Expenditures

Sources of Government Revenues & Expenditures Expenditures Recurrent expenditures - refer to the day-to-day cost of
Sources of Government Revenues & Expenditures Expenditures Recurrent expenditures - refer to the day-to-day cost of

Expenditures

Recurrent expenditures - refer to the day-to-day cost of running the government.

Development expenditures - pertain to cost of capital projects.

General Course for Revenue Officers

TMD

GPT 210 Slide 10

Objectives of Fiscal Policy To keep the public sector lean and trim so as to
Objectives of Fiscal Policy To keep the public sector lean and trim so as to

Objectives of Fiscal Policy

Objectives of Fiscal Policy To keep the public sector lean and trim so as to free
Objectives of Fiscal Policy To keep the public sector lean and trim so as to free

To keep the public sector lean and trim so as to free more manpower and financial resources for the private sector;

To

expenditures from operating revenue;

finance

total

operating

and

development

To focus government expenditures in areas which yield lasting returns, i.e., Education, health care, infrastructure and housing;

General Course for Revenue Officers

TMD

GPT 210 Slide 11

Objectives of Fiscal Policy To promote desirable level of employment; To promote desirable level of
Objectives of Fiscal Policy To promote desirable level of employment; To promote desirable level of

Objectives of Fiscal Policy

Objectives of Fiscal Policy To promote desirable level of employment; To promote desirable level of output;
Objectives of Fiscal Policy To promote desirable level of employment; To promote desirable level of output;

To promote desirable level of employment;

To promote desirable level of output;

To promote a desirable level of income and its proper distribution; and

To promote desirable level of prices.

General Course for Revenue Officers

TMD

GPT 210 Slide 12

Tax Policy Tax policy is an integral part of fiscal policy. Taxes not only provide
Tax Policy Tax policy is an integral part of fiscal policy. Taxes not only provide

Tax Policy

Tax Policy Tax policy is an integral part of fiscal policy. Taxes not only provide government
Tax Policy Tax policy is an integral part of fiscal policy. Taxes not only provide government

Tax policy is an integral part of fiscal policy. Taxes not only provide government with the means to raise the revenue needed to fund its activities but also to provide the government with tax means to redistribute limited resources, maintain economic stability, promote growth and achieve specific social objectives.

General Course for Revenue Officers

TMD

GPT 210 Slide 13

BIR Share in National Government Tax Revenues ( CY 2004 ) BIR BOC 78.29% 20.47%
BIR Share in National Government Tax Revenues ( CY 2004 ) BIR BOC 78.29% 20.47%

BIR Share in National Government Tax Revenues ( CY 2004 )

BIR Share in National Government Tax Revenues ( CY 2004 ) BIR BOC 78.29% 20.47% Other
BIR Share in National Government Tax Revenues ( CY 2004 ) BIR BOC 78.29% 20.47% Other
BIR BOC 78.29% 20.47% Other Agencies 1.23%
BIR
BOC
78.29%
20.47%
Other Agencies
1.23%

General Course for Revenue Officers

TMD

GPT 210 Slide 14

BIR Tax Effort ( CY 1994 - 2004 ) 14 11.1 12.01 13.00 12.65 1
BIR Tax Effort ( CY 1994 - 2004 ) 14 11.1 12.01 13.00 12.65 1

BIR Tax Effort ( CY 1994 - 2004 )

BIR Tax Effort ( CY 1994 - 2004 ) 14 11.1 12.01 13.00 12.65 1 1.07
BIR Tax Effort ( CY 1994 - 2004 ) 14 11.1 12.01 13.00 12.65 1 1.07
14 11.1 12.01 13.00 12.65 1 1.07 12 11.47 10.91 10.58 9.96 9.91 9.67 10
14
11.1 12.01 13.00 12.65
1
1.07
12
11.47 10.91 10.58
9.96 9.91 9.67
10
8
TAX
EFFORT (%)
6
4
2
0
TMD
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004

General Course for Revenue Officers

GPT 210 Slide 15

Percent Distribution of BIR Collection by Major Type of Tax CY 2004 Other Taxes Percentage
Percent Distribution of BIR Collection by Major Type of Tax CY 2004 Other Taxes Percentage

Percent Distribution of BIR Collection by Major Type of Tax CY 2004

Distribution of BIR Collection by Major Type of Tax CY 2004 Other Taxes Percentage Taxes 5.99%
Distribution of BIR Collection by Major Type of Tax CY 2004 Other Taxes Percentage Taxes 5.99%

Other Taxes

Percentage Taxes

5.99%

4.72%

Other Taxes Percentage Taxes 5.99% 4.72% 17.14% VAT Excise Taxes 1 2 . 7 1 %

17.14%

VAT

Excise Taxes

12.71%

59.44%

Income Taxes

General Course for Revenue Officers

TMD

GPT 210 Slide 16

Percent Distribution of Collection by Manner of Payment CY 2004 0.17% Preliminary/ Final Assessment 99.77%
Percent Distribution of Collection by Manner of Payment CY 2004 0.17% Preliminary/ Final Assessment 99.77%

Percent Distribution of Collection by Manner of Payment CY 2004

Distribution of Collection by Manner of Payment CY 2004 0.17% Preliminary/ Final Assessment 99.77%
Distribution of Collection by Manner of Payment CY 2004 0.17% Preliminary/ Final Assessment 99.77%

0.17%

Preliminary/

Final

Assessment

99.77%
99.77%

Voluntary

Payments

0.06%

Delinguent

Accounts

General Course for Revenue Officers

TMD

GPT 210 Slide 17

Comparative Collection by Manner of Payment (CY 2004 VS 2003) CY 2004 CY 2003 400
Comparative Collection by Manner of Payment (CY 2004 VS 2003) CY 2004 CY 2003 400

Comparative Collection by Manner of Payment (CY 2004 VS 2003)

Comparative Collection by Manner of Payment (CY 2004 VS 2003) CY 2004 CY 2003 400 300
Comparative Collection by Manner of Payment (CY 2004 VS 2003) CY 2004 CY 2003 400 300
CY 2004 CY 2003 400 300 468.54 200 424.80 CY 2004 CY 2003 CY 2004
CY 2004
CY 2003
400
300
468.54
200
424.80
CY 2004
CY 2003
CY 2004
CY 2003
100
0
Voluntary Payments
Preliminary/Final
Delinquent
Assessments
Accounts
0.817
1.45
0.272
0.262
In Billion Pesos

General Course for Revenue Officers

TMD

GPT 210 Slide 18

Definition of Taxation or the process or means sovereign, through its law-making body, raises revenue
Definition of Taxation or the process or means sovereign, through its law-making body, raises revenue

Definition of Taxation

Definition of Taxation or the process or means sovereign, through its law-making body, raises revenue to
Definition of Taxation or the process or means sovereign, through its law-making body, raises revenue to

or the

process or means

sovereign, through its law-making body, raises revenue to defray the necessary expenses of the government.

which the

It

is

the

act of levying

a

tax,

by

General Course for Revenue Officers

TMD

GPT 210 Slide 19

Definition of Taxes Taxes are the enforced proportional contributions levied by the law-making body of
Definition of Taxes Taxes are the enforced proportional contributions levied by the law-making body of

Definition of Taxes

Definition of Taxes Taxes are the enforced proportional contributions levied by the law-making body of the
Definition of Taxes Taxes are the enforced proportional contributions levied by the law-making body of the

Taxes are the enforced proportional contributions levied by the law-making body of the state by virtue of its sovereignty upon the persons or properties within its jurisdiction for the support of the government and all its public needs.

General Course for Revenue Officers

TMD

GPT 210 Slide 20

Nature and Scope of the Power of Taxation taxation is comprehensive, plenary, unlimited and supreme.
Nature and Scope of the Power of Taxation taxation is comprehensive, plenary, unlimited and supreme.

Nature and Scope of the Power of Taxation

Nature and Scope of the Power of Taxation taxation is comprehensive, plenary, unlimited and supreme. It
Nature and Scope of the Power of Taxation taxation is comprehensive, plenary, unlimited and supreme. It

taxation is

comprehensive, plenary, unlimited and supreme. It is essentially

legislative in character and is inherent in the state.

The

of

power

General Course for Revenue Officers

TMD

GPT 210 Slide 21

Theory and Basis of Taxation •The power of taxation proceeds upon the theory that the
Theory and Basis of Taxation •The power of taxation proceeds upon the theory that the

Theory and Basis of Taxation

Theory and Basis of Taxation •The power of taxation proceeds upon the theory that the existence
Theory and Basis of Taxation •The power of taxation proceeds upon the theory that the existence

•The power of taxation proceeds upon the theory that the existence of government is a necessity, that the government cannot exist without the means to pay its expenses and for these means, it has the right to compel its citizens and properties within its limit to contribute.

•The basis of taxation is found on the reciprocal duties of protection and support between the state and its inhabitants. The state collects taxes from the subjects of taxation , the citizen pays taxes in order that he may be secured in the enjoyment of the benefits of an organized society.

General Course for Revenue Officers

TMD

GPT 210 Slide 22

PRIMARY PURPOSE OF TAXATION Provide funds or property with which to promote the general welfare
PRIMARY PURPOSE OF TAXATION Provide funds or property with which to promote the general welfare

PRIMARY PURPOSE OF TAXATION

PRIMARY PURPOSE OF TAXATION Provide funds or property with which to promote the general welfare and
PRIMARY PURPOSE OF TAXATION Provide funds or property with which to promote the general welfare and

Provide funds or property with which to promote the general welfare and protection of its citizens.

General Course for Revenue Officers

TMD

GPT 210 Slide 23

SECONDARY OR NON-REVENUE PURPOSES OF TAXATION • To reduce excessive inequalities of wealth and means
SECONDARY OR NON-REVENUE PURPOSES OF TAXATION • To reduce excessive inequalities of wealth and means

SECONDARY OR NON-REVENUE PURPOSES OF TAXATION

SECONDARY OR NON-REVENUE PURPOSES OF TAXATION • To reduce excessive inequalities of wealth and means by
SECONDARY OR NON-REVENUE PURPOSES OF TAXATION • To reduce excessive inequalities of wealth and means by

• To reduce excessive inequalities of wealth and means by using the progressive scheme of income taxation and imposing estate taxes to equalize wealth.

• To protect local industries against foreign competitors by imposing protective tariff on imported goods.

• To encourage the growth of home industries through the proper use of tax exemptions and tax incentives.

• To implement the police power of the state in promoting the general welfare.

General Course for Revenue Officers

TMD

GPT 210 Slide 24

SECONDARY OR NON-REVENUE PURPOSES OF TAXATION (cont.) • To use taxes on imported goods as
SECONDARY OR NON-REVENUE PURPOSES OF TAXATION (cont.) • To use taxes on imported goods as

SECONDARY OR NON-REVENUE PURPOSES OF TAXATION (cont.)

SECONDARY OR NON-REVENUE PURPOSES OF TAXATION (cont.) • To use taxes on imported goods as a
SECONDARY OR NON-REVENUE PURPOSES OF TAXATION (cont.) • To use taxes on imported goods as a

• To use taxes on imported goods as a bargaining tool in trade negotiations with other countries.

• To

and halt inflation by

increasing taxes in periods of prosperity and expand business and ward-off depression by lowering taxes in periods of slump.

curb

spending

power

• To promote science and invention or to finance activities or to improve efficiency of military or local police forces in the maintenance of peace and order through the grant of subsidies.

General Course for Revenue Officers

TMD

GPT 210 Slide 25

Other Aspects of Taxation or Taxation System • Levying or imposition of the tax -
Other Aspects of Taxation or Taxation System • Levying or imposition of the tax -

Other Aspects of Taxation or Taxation System

Other Aspects of Taxation or Taxation System • Levying or imposition of the tax - this
Other Aspects of Taxation or Taxation System • Levying or imposition of the tax - this

Levying or imposition of the tax- this refers to the process of determining the persons or property to be taxed; the purpose of the tax as long as it is a public purpose; the sum/s to be raised; the rate thereof; and the manner, means and agencies of collection of the tax. It is legislative act with powers vested in Congress.

Collection of the tax- this refers to the manner of enforcing the tax obligation on the part of those required to pay the tax. It is essentially administrative in character with powers vested in the Department of Finance especially the Bureau of Internal Revenue and the local government units.

General Course for Revenue Officers

TMD

GPT 210 Slide 26

Essential Characteristics of Tax It is enforced contribution. It is levied pursuant to legislative authority.
Essential Characteristics of Tax It is enforced contribution. It is levied pursuant to legislative authority.

Essential Characteristics of Tax

Essential Characteristics of Tax It is enforced contribution. It is levied pursuant to legislative authority. It
Essential Characteristics of Tax It is enforced contribution. It is levied pursuant to legislative authority. It

It is enforced contribution.

It is levied pursuant to legislative authority.

It is proportionate in character.

It is generally payable in money.

It is levied by the state which has jurisdiction over the persons or property.

General Course for Revenue Officers

TMD

GPT 210 Slide 27

Essential Characteristics of Tax It is levied and collected for public purpose or purposes. It
Essential Characteristics of Tax It is levied and collected for public purpose or purposes. It

Essential Characteristics of Tax

Essential Characteristics of Tax It is levied and collected for public purpose or purposes. It is
Essential Characteristics of Tax It is levied and collected for public purpose or purposes. It is

It is levied and collected for public purpose or purposes.

It is commonly required to be paid at regular periods or intervals.

It partakes of an involuntary contribution and

public

the

revenue

to

government

for

purpose.

It is a compulsory government exaction or

levy

business.

on

persons,

property,

General Course for Revenue Officers

income

and

TMD

GPT 210 Slide 28

Basic Principles of a Sound Tax System Fiscal Adequacy - the sources of revenues should
Basic Principles of a Sound Tax System Fiscal Adequacy - the sources of revenues should

Basic Principles of a Sound Tax System

Basic Principles of a Sound Tax System Fiscal Adequacy - the sources of revenues should be
Basic Principles of a Sound Tax System Fiscal Adequacy - the sources of revenues should be

Fiscal Adequacy - the sources of revenues should be sufficient to meet expenditures of government regardless of business conditions.

Equality or theoretical justice - that taxes must be imposed with equity, certainty, convenience, and by considering the taxpayer’s ability to pay.

Administrative feasibility and compliance - law must be capable of reasonable and convenient enforcement, just and effective administration, and taxpayers should find it easy and reasonable to comply.

General Course for Revenue Officers

TMD

GPT 210 Slide 29

Basic Principles of a Sound Tax System Consistency or compatibility with economic objectives or goals
Basic Principles of a Sound Tax System Consistency or compatibility with economic objectives or goals

Basic Principles of a Sound Tax System

Basic Principles of a Sound Tax System Consistency or compatibility with economic objectives or goals -
Basic Principles of a Sound Tax System Consistency or compatibility with economic objectives or goals -

Consistency or compatibility with economic objectives or goals - the economic effects of taxation extend far beyond the matter of incidence, the allocation of resources to the public sector, and redistribution of income.

General Course for Revenue Officers

TMD

GPT 210 Slide 30

Definition of Taxation, Eminent Domain, and Police Power Taxation - refers to the power by
Definition of Taxation, Eminent Domain, and Police Power Taxation - refers to the power by

Definition of Taxation, Eminent Domain, and Police Power

Definition of Taxation, Eminent Domain, and Police Power Taxation - refers to the power by which
Definition of Taxation, Eminent Domain, and Police Power Taxation - refers to the power by which

Taxation - refers to the power by which the sovereign raises revenue to defray the necessary expenses of the government.

Eminent Domain - refers to the power of the state or those to whom the power has been delegated to take private property for public use upon payment of just compensation to be ascertained according to law. It is sometimes called expropriation.

Police Power - refers to the power of the state to enact laws in relation to persons and property, that may promote public health, public morals, public safety, and the general welfare and prosperity of its inhabitants.

General Course for Revenue Officers

TMD

GPT 210 Slide 31

Similarities among Taxation, Eminent Domain & Police Power They all rest upon necessity because there
Similarities among Taxation, Eminent Domain & Police Power They all rest upon necessity because there

Similarities among Taxation, Eminent Domain & Police Power

among Taxation, Eminent Domain & Police Power They all rest upon necessity because there can be
among Taxation, Eminent Domain & Police Power They all rest upon necessity because there can be

They all rest upon necessity because there can be no effective government without them.

They all underlie and exist independently with the constitution although the conditions for their exercise may be prescribed by the Constitution and by law.

There are ways by which the state interferes with private rights and property.

General Course for Revenue Officers

TMD

GPT 210 Slide 32

Similarities among Taxation, Eminent Domain & Police Power They are legislative in nature and character
Similarities among Taxation, Eminent Domain & Police Power They are legislative in nature and character

Similarities among Taxation, Eminent Domain & Police Power

among Taxation, Eminent Domain & Police Power They are legislative in nature and character although the
among Taxation, Eminent Domain & Police Power They are legislative in nature and character although the

They are legislative in nature and character although the actual exercise of the powers is given to the executive authorities, national or local.

They all presupposes an equivalent compensation received, directly or indirectly, by the persons affected by the exercise of these powers by the government.

General Course for Revenue Officers

TMD

GPT 210 Slide 33

Taxation Distinguished from Police Power and Eminent Domain Taxation Police Power Eminent Domain As to
Taxation Distinguished from Police Power and Eminent Domain Taxation Police Power Eminent Domain As to

Taxation Distinguished from Police Power and Eminent Domain

Taxation Distinguished from Police Power and Eminent Domain Taxation Police Power Eminent Domain As to compensation
Taxation Distinguished from Police Power and Eminent Domain Taxation Police Power Eminent Domain As to compensation

Taxation

Police

Power

Eminent

Domain

As to compensation or benefits received

It is assumed that the individual receives the equivalent of the tax in the form of protection and benefits received from the govern- ment.

The person affected receives no direct and immediate benefits but only such as may arise from the mainte- nance of a healthy economic standard of society.

The person affected receives the market value of the property taken from him.

General Course for Revenue Officers

TMD

GPT 210 Slide 34

Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain
Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain

Taxation Distinguished from Police Power and Eminent Domain

Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain
Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain
 

Taxation

Police

Eminent

Power

Domain

As to whom directed

Directed to the public

Directed to the public

Directed to a particular person or property

 

TMD

General Course for Revenue Officers

GPT 210 Slide 35

Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain
Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain

Taxation Distinguished from Police Power and Eminent Domain

Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain
Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain
 

Taxation

Police

Eminent

Power

Domain

As to nature of compensation

It presumed protection or benefits.

It provides better social & economic standards.

It requires just compensation.

As to how property is taken

Property is taken to support the government.

Property is taken or destroyed for public welfare.

Property is

taken

for

 

public use.

General Course for Revenue Officers

TMD

GPT 210 Slide 36

Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain
Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain

Taxation Distinguished from Police Power and Eminent Domain

Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain
Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain
 

Taxation

Police

Eminent

Power

Domain

As to relation to impairment clause

It

inferior to

is

is superior to impairment clause.

It

is superior to impairment clause.

It

impairment

clause.

General Course for Revenue Officers

TMD

GPT 210 Slide 37

Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain
Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain

Taxation Distinguished from Police Power and Eminent Domain

Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain
Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain
 

Taxation

Police

Eminent

Power

Domain

As to

The property is taken from the taxpayer to support the government.

The use of property is regulated for the purpose of promoting the general welfare; hence, it is not compensable.

The property is taken for public use; hence, it must be compensable.

purpose

General Course for Revenue Officers

TMD

GPT 210 Slide 38

Taxation Distinguished from Police Power and Eminent Domain Taxation Police Power Eminent Domain As to
Taxation Distinguished from Police Power and Eminent Domain Taxation Police Power Eminent Domain As to

Taxation Distinguished from Police Power and Eminent Domain

Taxation Distinguished from Police Power and Eminent Domain Taxation Police Power Eminent Domain As to person
Taxation Distinguished from Police Power and Eminent Domain Taxation Police Power Eminent Domain As to person

Taxation

Police

Power

Eminent

Domain

As to person involved or affected

It operates upon a community or a class of individuals.

It operates upon a community or a class of individuals.

It operates on the individual as the owner of a particular property.

General Course for Revenue Officers

TMD

GPT 210 Slide 39

Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain
Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain

Taxation Distinguished from Police Power and Eminent Domain

Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain
Taxation Distinguished from Police Power and Eminent Domain   Taxation Police Eminent Power Domain
 

Taxation

Police

Eminent

Power

Domain

As to effect

The money contributed in the concept of taxes becomes part of the public funds.

There is no transfer of title; at most, there is restraint in the injurious use of property.

There is transfer of the right of property whether it be of ownership or a lesser right or possession.

General Course for Revenue Officers

TMD

GPT 210 Slide 40

Taxation Distinguished from Police Power and Eminent Domain Taxation Police Power Eminent Domain As to
Taxation Distinguished from Police Power and Eminent Domain Taxation Police Power Eminent Domain As to

Taxation Distinguished from Police Power and Eminent Domain

Taxation Distinguished from Police Power and Eminent Domain Taxation Police Power Eminent Domain As to relationship
Taxation Distinguished from Police Power and Eminent Domain Taxation Police Power Eminent Domain As to relationship

Taxation

Police

Power

Eminent

Domain

As to relationship to the Constitution

It is subject to certain constitu- tional limitations including the prohibition against the impairment of the obligations of contracts.

It is relatively free from cons- titutional limita- tions and is superior to the impairment provisions.

It is also inferior to the impairment prohibition so that the government cannot expropriate property which under a contract it had previously bound itself to purchase from other contracting party.

General Course for Revenue Officers

TMD

GPT 210 Slide 41

Taxation Distinguished from Police Power and Eminent Domain     Taxation   Police Eminent  
Taxation Distinguished from Police Power and Eminent Domain     Taxation   Police Eminent  

Taxation Distinguished from Police Power and Eminent Domain

Taxation Distinguished from Police Power and Eminent Domain     Taxation   Police Eminent  
Taxation Distinguished from Police Power and Eminent Domain     Taxation   Police Eminent  
   

Taxation

 

Police

Eminent

 

Power

Domain

As to authority which exercises the power

It

may be

It

may be

It may be granted to public service companies or public utilities, if the power is granted by the law.

exercised only by the

exercised only by the government or

government or its political

subdivisions.

its political subdivisions.

General Course for Revenue Officers

TMD

GPT 210 Slide 42

Taxation Distinguished from Police Power and Eminent Domain Taxation Police Power Eminent Domain As to
Taxation Distinguished from Police Power and Eminent Domain Taxation Police Power Eminent Domain As to

Taxation Distinguished from Police Power and Eminent Domain

Taxation Distinguished from Police Power and Eminent Domain Taxation Police Power Eminent Domain As to amount
Taxation Distinguished from Police Power and Eminent Domain Taxation Police Power Eminent Domain As to amount

Taxation

Police

Power

Eminent

Domain

As to amount imposition

There is generally no limit to the amount of tax that may be imposed.

The amount imposed is limited to the cost of the license and the necessary expenses of police surveillance, inspection, examination, or regulation.

There is no amount imposed.

General Course for Revenue Officers

TMD

GPT 210 Slide 43

Classifications of Taxes As to Subject Matter or Object Kinds of Taxes on Persons 1.
Classifications of Taxes As to Subject Matter or Object Kinds of Taxes on Persons 1.

Classifications of Taxes

Classifications of Taxes As to Subject Matter or Object Kinds of Taxes on Persons 1. Individual
Classifications of Taxes As to Subject Matter or Object Kinds of Taxes on Persons 1. Individual

As to Subject Matter or Object

Kinds of Taxes on Persons

1. Individual Income Tax - is the tax or imposition on:

• The Gross Compensation Income of a person based on a graduated scale. The income tax is based on the gross compensation income less personal exemptions and premium on health and/or hospital insurance as the case maybe.

• The net income from the exercise of a profession or other income derived from business.

General Course for Revenue Officers

TMD

GPT 210 Slide 44

Classifications of Taxes 2. Poll or Residence Tax - refers to as per capita or
Classifications of Taxes 2. Poll or Residence Tax - refers to as per capita or

Classifications of Taxes

Classifications of Taxes 2. Poll or Residence Tax - refers to as per capita or Poll
Classifications of Taxes 2. Poll or Residence Tax - refers to as per capita or Poll

2. Poll or Residence Tax - refers to as per capita or Poll Tax. Ex.Community Tax

3. Privilege or Professional Tax - is a tax levied in the practice of profession. All professionals like lawyers, CPAs, doctors, etc. are required to pay their Professional Tax before they can practice their profession.

General Course for Revenue Officers

TMD

GPT 210 Slide 45

Classifications of Taxes Kinds of Taxes on Property 1. Transfer Tax - vary depending on
Classifications of Taxes Kinds of Taxes on Property 1. Transfer Tax - vary depending on

Classifications of Taxes

Classifications of Taxes Kinds of Taxes on Property 1. Transfer Tax - vary depending on the
Classifications of Taxes Kinds of Taxes on Property 1. Transfer Tax - vary depending on the

Kinds of Taxes on Property

1. Transfer Tax - vary depending on the manner in which property may be transferred. At present, there are two kinds of Transfer Tax under NIRC, namely:

• Estate Tax - tax levied on property transferred by way of succession. It is based on the gross value of the state of a deceased person.

• Donor's Tax - refers to the gratuitous transfer of property by one person to another during the former's lifetime. This is called "donation intervivos" which means that the terms of the donation will take effect during the lifetime of the donor.

General Course for Revenue Officers

TMD

GPT 210 Slide 46

Classifications of Taxes 2. Taxes on Real Property • Real Property Tax - is the
Classifications of Taxes 2. Taxes on Real Property • Real Property Tax - is the

Classifications of Taxes

Classifications of Taxes 2. Taxes on Real Property • Real Property Tax - is the tax
Classifications of Taxes 2. Taxes on Real Property • Real Property Tax - is the tax

2. Taxes on Real Property

• Real Property Tax - is the tax imposed on a property owner based on the assessed value of his property. The percentage tax varies depending on the classification of the property whether it is classified as commercial or residential. It is also based on the current Fair Market Value or Zonal Value of the property whichever is higher.

• Capital Gains Tax - a property owner who sells his real property must pay his CGT which is based on the selling price or zonal value, whichever is higher.

General Course for Revenue Officers

TMD

GPT 210 Slide 47

Classifications of Taxes Kinds of Business Taxes 1. Sales Tax tax levied - property. on
Classifications of Taxes Kinds of Business Taxes 1. Sales Tax tax levied - property. on

Classifications of Taxes

Classifications of Taxes Kinds of Business Taxes 1. Sales Tax tax levied - property. on the
Classifications of Taxes Kinds of Business Taxes 1. Sales Tax tax levied - property. on the

Kinds of Business Taxes

1. Sales

Tax

tax levied

-

property.

on the

sale

of real or personal

2. Excise Tax - an internal tax imposed on the manufacture, sale or consumption of an item within a country, or paid for a license to carry on certain callings or occupations.

Two (2) most common kinds of excise tax

• Specific Tax - based on weight or volume, capacity, or any other physical unit of measurement of the subject goods.

• Ad Valorem Tax - based on the selling price or on other specified value of the goods.

General Course for Revenue Officers

TMD

GPT 210 Slide 48

Classifications of Taxes As to who bears the burden • Direct - a tax which
Classifications of Taxes As to who bears the burden • Direct - a tax which

Classifications of Taxes

Classifications of Taxes As to who bears the burden • Direct - a tax which is
Classifications of Taxes As to who bears the burden • Direct - a tax which is

As to who bears the burden

Direct - a tax which is demanded from persons who also shoulder the burden of the tax for which the taxpayer is directly liable or for which he cannot shift to another.

Indirect - a tax is demanded from one person in the expectation and intention that he shall indemnify himself at the expense of another, and the burden of such tax falling finally upon the ultimate purchaser or consumer.

General Course for Revenue Officers

TMD

GPT 210 Slide 49

Classifications of Taxes As to determination of amount • Specific – a tax of fixed
Classifications of Taxes As to determination of amount • Specific – a tax of fixed

Classifications of Taxes

Classifications of Taxes As to determination of amount • Specific – a tax of fixed amount
Classifications of Taxes As to determination of amount • Specific – a tax of fixed amount

As to determination of amount

Specific – a tax of fixed amount that is imposed based on physical unit of measurements, as by head or number, weight, or length or volume.

Ad valorem - a tax of a fixed proportion to the value of property with respect to which the tax is assessed.

General Course for Revenue Officers

TMD

GPT 210 Slide 50

Classifications of Taxes As to purpose • General, fiscal or revenue – a tax imposed
Classifications of Taxes As to purpose • General, fiscal or revenue – a tax imposed

Classifications of Taxes

Classifications of Taxes As to purpose • General, fiscal or revenue – a tax imposed for
Classifications of Taxes As to purpose • General, fiscal or revenue – a tax imposed for

As to purpose

General, fiscal or revenue – a tax imposed for the general purposes of the government to raise revenues for government needs.

Special or regulatory - a tax imposed for a special purpose regardless of whether revenue is raised or not, and is intended to achieve some social or economic end.

General Course for Revenue Officers

TMD

GPT 210 Slide 51

Classifications of Taxes As to scope or authority imposing the tax • National – a
Classifications of Taxes As to scope or authority imposing the tax • National – a

Classifications of Taxes

Classifications of Taxes As to scope or authority imposing the tax • National – a tax
Classifications of Taxes As to scope or authority imposing the tax • National – a tax

As to scope or authority imposing the tax

National – a tax imposed by the National Government.

Municipal or local - a tax imposed by municipal or local government.

General Course for Revenue Officers

TMD

GPT 210 Slide 52

Classifications of Taxes As to graduation or rate • Proportional – a tax based on
Classifications of Taxes As to graduation or rate • Proportional – a tax based on

Classifications of Taxes

Classifications of Taxes As to graduation or rate • Proportional – a tax based on a
Classifications of Taxes As to graduation or rate • Proportional – a tax based on a

As to graduation or rate

Proportional – a tax based on a fixed percentage of the amount of property, receipts, or other basis to be taxed.

Progressive or graduated - a tax the rate of which increases as the tax base or bracket increases.

Regressive – a tax the rate of which decreases as the tax base or bracket increases.

Degressive – a tax where the increases of rates is not proportionate to the increase of tax base.

General Course for Revenue Officers

TMD

GPT 210 Slide 53

Tax as Distinguished from Other Terms From license or permit fee • Tax - an
Tax as Distinguished from Other Terms From license or permit fee • Tax - an

Tax as Distinguished from Other Terms

Tax as Distinguished from Other Terms From license or permit fee • Tax - an enforced
Tax as Distinguished from Other Terms From license or permit fee • Tax - an enforced

From license or permit fee

Tax - an enforced contribution assessed by sovereign authority to defray public expenses; it is imposed for revenue purposes; it involves exercise of taxing power; it has generally no maximum amount to be imposed; it is imposed on persons, property and right to exercise privilege; its non-payment does not make a business or act illegal.

License - legal compensation or reward of an officer for specific services; it is imposed for regulatory purposes; it involves exercise of police power; its amount is limited to cost of issuing the license and reasonable police surveillance; it is imposed only on right to exercise privilege; its non-payment makes the act or business illegal.

General Course for Revenue Officers

TMD

GPT 210 Slide 54

Tax as Distinguished from Other Terms From toll • Tax - a demand of sovereignty
Tax as Distinguished from Other Terms From toll • Tax - a demand of sovereignty

Tax as Distinguished from Other Terms

Tax as Distinguished from Other Terms From toll • Tax - a demand of sovereignty imposed
Tax as Distinguished from Other Terms From toll • Tax - a demand of sovereignty imposed

From toll

Tax - a demand of sovereignty imposed exclusively by the State or Government; it is for the support of government; its amount is regulated by necessities of government.

Toll - a demand of proprietorship; it is imposed by private persons and also by government; it is a compensation for use of another’s property; its amount is determined by cost of property.

General Course for Revenue Officers

TMD

GPT 210 Slide 55

Tax as Distinguished from Other Terms From penalty • Tax - aimed at raising revenue;
Tax as Distinguished from Other Terms From penalty • Tax - aimed at raising revenue;

Tax as Distinguished from Other Terms

Tax as Distinguished from Other Terms From penalty • Tax - aimed at raising revenue; it
Tax as Distinguished from Other Terms From penalty • Tax - aimed at raising revenue; it

From penalty

Tax - aimed at raising revenue; it is imposed only by the government.

Penalty - designated to regulate conduct; it is imposed by the government and also by private entities.

General Course for Revenue Officers

TMD

GPT 210 Slide 56

Tax as Distinguished from Other Terms From special assessment • Tax - levied on persons,
Tax as Distinguished from Other Terms From special assessment • Tax - levied on persons,

Tax as Distinguished from Other Terms

Tax as Distinguished from Other Terms From special assessment • Tax - levied on persons, property,
Tax as Distinguished from Other Terms From special assessment • Tax - levied on persons, property,

From special assessment

Tax - levied on persons, property, or exercise of privilege; it ca be made a personal liability of the person assessed; it is based on government’s necessity without any special benefit accruing to taxpayer; it is of general application. Not exceptional as to time and locality.

Special Assessment - levied only on land; it is not a personal liability of person assessed; it is based on special benefits resulting to property assessed and not on necessity; it is exceptional both as the time and place and not of general application.

General Course for Revenue Officers

TMD

GPT 210 Slide 57

Tax as Distinguished from Other Terms From revenue • Tax - refers to the income
Tax as Distinguished from Other Terms From revenue • Tax - refers to the income

Tax as Distinguished from Other Terms

Tax as Distinguished from Other Terms From revenue • Tax - refers to the income derived
Tax as Distinguished from Other Terms From revenue • Tax - refers to the income derived

From revenue

Tax - refers to the income derived from the regular system of taxation, and as such, accrues more or less regularly every year.

Revenue - refers to the aggregate total of all funds or income derived by the government from taxes or from whatever source or whatever means. It is broader in scope.

General Course for Revenue Officers

TMD

GPT 210 Slide 58

Tax as Distinguished from Other Terms From custom duties • Tax - broader than custom
Tax as Distinguished from Other Terms From custom duties • Tax - broader than custom

Tax as Distinguished from Other Terms

Tax as Distinguished from Other Terms From custom duties • Tax - broader than custom duties
Tax as Distinguished from Other Terms From custom duties • Tax - broader than custom duties

From custom duties

Tax - broader than custom duties on tariff because tax refers to an exaction by the government and therefore includes tariff and custom duties.

Custom duties - refers to a kind of tax imposed on articles that are traded internationally, particularly impositions on imported or exported goods.

General Course for Revenue Officers

TMD

GPT 210 Slide 59

Tax as Distinguished from Other Terms From debt • Tax - based on law; it
Tax as Distinguished from Other Terms From debt • Tax - based on law; it

Tax as Distinguished from Other Terms

Tax as Distinguished from Other Terms From debt • Tax - based on law; it cannot
Tax as Distinguished from Other Terms From debt • Tax - based on law; it cannot

From debt

Tax - based on law; it cannot generally be assigned; it is generally payable in money; it cannot be a subject of set-off or compensation; imprisonment is sanctioned for the non- payment of tax; it is governed by special prescriptive periods under the Tax Code; it does not draw interest except only when delinquent.

Debt - generally based on expressed or implied contracts; it may be paid in kind; it may be a subject of set-off or compensation; it can be assigned; a person cannot be imprisoned for non-payment thereof except when it arises from a crime; it is governed by prescriptive periods under the Civil Code and other special laws.

General Course for Revenue Officers

TMD

GPT 210 Slide 60

Tax as Distinguished from Other Terms From subsidy A subsidy is a pecuniary aid directly
Tax as Distinguished from Other Terms From subsidy A subsidy is a pecuniary aid directly

Tax as Distinguished from Other Terms

Tax as Distinguished from Other Terms From subsidy A subsidy is a pecuniary aid directly granted
Tax as Distinguished from Other Terms From subsidy A subsidy is a pecuniary aid directly granted

From subsidy

A subsidy is a pecuniary aid directly granted by the government to an individual or private commercial enterprise deemed beneficial to the public. It is not a tax although a tax may have to be imposed to pay it.

General Course for Revenue Officers

TMD

GPT 210 Slide 61

Limitations on the Power of Taxation • Inherent Limitations ( Those restrictions not embodied in
Limitations on the Power of Taxation • Inherent Limitations ( Those restrictions not embodied in

Limitations on the Power of Taxation

Limitations on the Power of Taxation • Inherent Limitations ( Those restrictions not embodied in the
Limitations on the Power of Taxation • Inherent Limitations ( Those restrictions not embodied in the

Inherent Limitations ( Those restrictions not embodied in the Constitution)

»Requirement of public purpose

»Limitation of territorial jurisdiction

»Prohibition against delegation of taxing power

»Limitation on international comity

»Exemption from taxation of government agencies or instrumentalities

» No double taxation

» No excessive taxation

General Course for Revenue Officers

TMD

GPT 210 Slide 62

Limitations on the Power of Taxation Constitutional Limitations: (Those restrictions expressly provided in the
Limitations on the Power of Taxation Constitutional Limitations: (Those restrictions expressly provided in the

Limitations on the Power of Taxation

Limitations on the Power of Taxation Constitutional Limitations: (Those restrictions expressly provided in the
Limitations on the Power of Taxation Constitutional Limitations: (Those restrictions expressly provided in the

Constitutional Limitations:

(Those restrictions expressly provided in the Constitution)

• Requirement of due process of law

• Requirement of equal protection of the laws

• Prohibition against imprisonment for non- payment of poll tax

• Prohibition against impairment of the obligation of contracts

Requirement of uniformity and equity in taxation

• Non-diversification of tax collection

Delegation of the power of taxation

• The Supreme Court’s power to review

General Course for Revenue Officers

TMD

GPT 210 Slide 63

Limitations on the Power of Taxation • Constitutional requirements in granting tax exemptions • Prohibition
Limitations on the Power of Taxation • Constitutional requirements in granting tax exemptions • Prohibition

Limitations on the Power of Taxation

Limitations on the Power of Taxation • Constitutional requirements in granting tax exemptions • Prohibition against
Limitations on the Power of Taxation • Constitutional requirements in granting tax exemptions • Prohibition against

• Constitutional requirements in granting tax exemptions

• Prohibition against infringement of religious freedom

• Prohibition against appropriation for religious purposes

• Prohibition against taxation of religious, charitable and educational entities, etc.

• Prohibition against taxation of non-stock, non-profit educational institution.

• Other Constitutional limitations such as the granting of exemptions; veto of appropriate revenue or tariff bills by the President; and non-impairment of the jurisdiction of the Supreme Court

General Course for Revenue Officers

TMD

GPT 210 Slide 64

Nature of Internal Revenue Law Internal revenue laws are not political in They are deemed
Nature of Internal Revenue Law Internal revenue laws are not political in They are deemed

Nature of Internal Revenue Law

Nature of Internal Revenue Law Internal revenue laws are not political in They are deemed to
Nature of Internal Revenue Law Internal revenue laws are not political in They are deemed to

Internal revenue laws are not political in

They are deemed to be the laws of

the occupied territory and not of the occupying enemy.

nature.

Taxes

nature

although there are penalties provided for their violation.

civil

and

penal

are

not

in

General Course for Revenue Officers

TMD

GPT 210 Slide 65

Construction of Tax Laws Provisions intended for the security of the citizen or taxpayer or
Construction of Tax Laws Provisions intended for the security of the citizen or taxpayer or

Construction of Tax Laws

Construction of Tax Laws Provisions intended for the security of the citizen or taxpayer or to
Construction of Tax Laws Provisions intended for the security of the citizen or taxpayer or to

Provisions intended for the security of the citizen or taxpayer or to ensure equality or uniformity of taxation are mandatory.

Provisions that are designed to inform administrative officers on tax matters are generally directory.

If the intent or meaning of the tax statute is not clear, or is doubtful as to whether a taxpayer is covered by the tax obligation, the tax law shall be construed against the government because revenue laws impose special burdens.

General Course for Revenue Officers

TMD

GPT 210 Slide 66

Construction of Tax Laws Where the intent to tax is clear and the taxpayer claims
Construction of Tax Laws Where the intent to tax is clear and the taxpayer claims

Construction of Tax Laws

Construction of Tax Laws Where the intent to tax is clear and the taxpayer claims that
Construction of Tax Laws Where the intent to tax is clear and the taxpayer claims that

Where the intent to tax is clear and the taxpayer claims that he is exempt from the tax obligation, the tax shall be construed against the taxpayer and in favor of the government because the power of taxation is necessary to the existence of such government.

Rules on the interpretation of custom and tariff laws do not apply to trade agreements, the former rules being promulgated in the exercise of the power of taxation while trade agreements are entered into the exercise of the police power.

If the tax law is repealed, taxes assessed before repeal of the law may still be collected unless the repealing law is made retroactive.

General Course for Revenue Officers

TMD

GPT 210 Slide 67

Construction of Tax Laws Tax exemptions are strictly construed except: If the law provides for
Construction of Tax Laws Tax exemptions are strictly construed except: If the law provides for

Construction of Tax Laws

Construction of Tax Laws Tax exemptions are strictly construed except: If the law provides for liberal
Construction of Tax Laws Tax exemptions are strictly construed except: If the law provides for liberal

Tax exemptions are strictly construed except:

If the law provides for liberal construction.

In case of special laws applying to special cases.

If the exemptions refer to public property.

In case of exemptions granted to entities organized

for charitable, religious or educational purposes.

Tax laws are given retroactive effect if there is a clear legislative intent in that regard. It has been held that tax laws shall have prospective effect only unless there is a clear provision to the contrary. If the retroactive effect would be harsh or oppressive, the same transgresses the constitutional limitations of due process.

General Course for Revenue Officers

TMD

GPT 210 Slide 68

Sources of Tax Laws ✔ Pertinent provisions of the Constitution ✔ Legislation or statutes, including
Sources of Tax Laws ✔ Pertinent provisions of the Constitution ✔ Legislation or statutes, including

Sources of Tax Laws

Sources of Tax Laws ✔ Pertinent provisions of the Constitution ✔ Legislation or statutes, including Presidential
Sources of Tax Laws ✔ Pertinent provisions of the Constitution ✔ Legislation or statutes, including Presidential

Pertinent provisions of the Constitution

Legislation or statutes, including Presidential Decrees and Executive Orders on taxation, and tax ordinances.

Administrative regulations and rulings or opinions of tax officials, including opinions of the Secretary of Justice.

Judicial decisions

Tax treaties or agreements entered into by the Philippines with other countries.

General Course for Revenue Officers

TMD

GPT 210 Slide 69

Definition of Situs of Taxation It literally means place of taxation. The basic rule is
Definition of Situs of Taxation It literally means place of taxation. The basic rule is

Definition of Situs of Taxation

Definition of Situs of Taxation It literally means place of taxation. The basic rule is that
Definition of Situs of Taxation It literally means place of taxation. The basic rule is that

It literally means place of taxation. The basic rule is that the state where the subject to be taxed has a situs may rightfully levy and collect the tax; and the situs is necessarily in the state which has jurisdiction or which exercises dominion over the subject in question. Thus, the person may be subject to taxation in several taxing jurisdictions.

General Course for Revenue Officers

TMD

GPT 210 Slide 70

Situs or Subjects of Taxation Persons Real property Personal Property • Tangible personal property •
Situs or Subjects of Taxation Persons Real property Personal Property • Tangible personal property •

Situs or Subjects of Taxation

Situs or Subjects of Taxation Persons Real property Personal Property • Tangible personal property •
Situs or Subjects of Taxation Persons Real property Personal Property • Tangible personal property •

Persons Real property Personal Property • Tangible personal property • Intangible personal property Income Business, occupation, and transaction Gratuitous transfer of property

General Course for Revenue Officers

TMD

GPT 210 Slide 71

Definition of double taxation In its strict sense , it is also referred to as
Definition of double taxation In its strict sense , it is also referred to as

Definition of double taxation

Definition of double taxation In its strict sense , it is also referred to as direct
Definition of double taxation In its strict sense , it is also referred to as direct

In its strict sense, it is also referred to as direct double taxation which means being taxed twice by the same taxing authority within the same jurisdiction or taxing district for the same purpose in the same year or taxing period some of the property in the territory.

In its broad sense, it is also referred to as indirect double taxation or taxation other than direct duplicate; it extends to all cases in which there is a burden of two or more pecuniary impositions.

General Course for Revenue Officers

TMD

GPT 210 Slide 72

Meaning of exemption from taxation This is a grant of immunity, express or implied, to
Meaning of exemption from taxation This is a grant of immunity, express or implied, to

Meaning of exemption from taxation

Meaning of exemption from taxation This is a grant of immunity, express or implied, to particular
Meaning of exemption from taxation This is a grant of immunity, express or implied, to particular

This is a grant of immunity, express or implied, to particular persons or corporations, or to persons or corporations of a particular class, from a tax which persons and corporations generally within the same state or taxing district, are obliged to pay. It is an immunity or a privilege; it is a freedom from a financial charge or burden to which others are subjected.

General Course for Revenue Officers

TMD

GPT 210 Slide 73

Grounds for grant of exemption Tax exemption may be based on contract. Tax exemption may
Grounds for grant of exemption Tax exemption may be based on contract. Tax exemption may

Grounds for grant of exemption

Grounds for grant of exemption Tax exemption may be based on contract. Tax exemption may be
Grounds for grant of exemption Tax exemption may be based on contract. Tax exemption may be

Tax exemption may be based on contract. Tax exemption may be based on some ground of public policy.

Tax exemption may be created in a treaty

on

grounds of reciprocity.

General Course for Revenue Officers

TMD

GPT 210 Slide 74

Nature of tax exemption ☛ An exemption from taxation is a mere personal privilege of
Nature of tax exemption ☛ An exemption from taxation is a mere personal privilege of

Nature of tax exemption

Nature of tax exemption ☛ An exemption from taxation is a mere personal privilege of the
Nature of tax exemption ☛ An exemption from taxation is a mere personal privilege of the

An exemption from taxation is a mere personal privilege of the grantee.

Tax exemption is generally revocable by the government.

Tax exemption implies a waiver.

Tax exemption is not necessarily discriminatory.

General Course for Revenue Officers

TMD

GPT 210 Slide 75

Kinds of tax exemptions As to manner of creation • Express or affirmative - occurs
Kinds of tax exemptions As to manner of creation • Express or affirmative - occurs

Kinds of tax exemptions

Kinds of tax exemptions As to manner of creation • Express or affirmative - occurs when
Kinds of tax exemptions As to manner of creation • Express or affirmative - occurs when

As to manner of creation

Express or affirmative - occurs when certain persons, property, or transactions are, by express provisions, exempted from all or certain taxes, either entirely or in part.

Implied exemption or exemption by omission - occurs when a tax is levied on certain classes of persons, properties, or transaction without mentioning the other classes.

General Course for Revenue Officers

TMD

GPT 210 Slide 76

Kinds of tax exemptions As to scope or extent • Total exemption - when certain
Kinds of tax exemptions As to scope or extent • Total exemption - when certain

Kinds of tax exemptions

Kinds of tax exemptions As to scope or extent • Total exemption - when certain persons,
Kinds of tax exemptions As to scope or extent • Total exemption - when certain persons,

As to scope or extent

Total exemption - when certain persons, property or transactions are exempted, expressly or implied, from all taxes.

Partial exemption - when certain persons, property, or transactions are exempted, expressly or implied, from certain taxes, either entirely or in part.

General Course for Revenue Officers

TMD

GPT 210 Slide 77

Kinds of tax exemptions As to object • Personal - those granted directly in favor
Kinds of tax exemptions As to object • Personal - those granted directly in favor

Kinds of tax exemptions

Kinds of tax exemptions As to object • Personal - those granted directly in favor of
Kinds of tax exemptions As to object • Personal - those granted directly in favor of

As to object

Personal - those granted directly in favor of such persons are within the contemplation of the law granting the exemption.

Impersonal - those granted directly in favor of a certain class of property.

General Course for Revenue Officers

TMD

GPT 210 Slide 78

Sources of tax exemptions Exemptions provided for in the Tax Code Exemptions provided for under
Sources of tax exemptions Exemptions provided for in the Tax Code Exemptions provided for under

Sources of tax exemptions

Sources of tax exemptions Exemptions provided for in the Tax Code Exemptions provided for under special
Sources of tax exemptions Exemptions provided for in the Tax Code Exemptions provided for under special
Exemptions provided for in the Tax Code Exemptions provided for under special laws TMD
Exemptions provided for in the
Tax Code
Exemptions provided for under
special laws
TMD

General Course for Revenue Officers

GPT 210 Slide 79

Construction of tax exemption statutes Tax exemptions are liberally construed in the following cases: When
Construction of tax exemption statutes Tax exemptions are liberally construed in the following cases: When

Construction of tax exemption statutes

Construction of tax exemption statutes Tax exemptions are liberally construed in the following cases: When the
Construction of tax exemption statutes Tax exemptions are liberally construed in the following cases: When the

Tax exemptions are liberally construed in the following cases:

When the law itself expressly provides for a literal construction then in case of doubt, it shall be resolved in favor of the exemption.

When the exemption is in favor of the government itself or its agencies, or of charitable, religious, and educational institutions because the general rule is that they are exempted from tax.

When there is an express mention or the taxpayer falls within the purview of the exemption by clear legislative intent.

General Course for Revenue Officers

TMD

GPT 210 Slide 80

Principles Governing Tax Exemption Exemptions from taxation are highly disfavored in law, and he who
Principles Governing Tax Exemption Exemptions from taxation are highly disfavored in law, and he who

Principles Governing Tax Exemption

Principles Governing Tax Exemption Exemptions from taxation are highly disfavored in law, and he who claims
Principles Governing Tax Exemption Exemptions from taxation are highly disfavored in law, and he who claims

Exemptions from taxation are highly disfavored in law, and he who claims an exemption must be able to justify his claim by the clearest grant of organic or statute law.

He who claims an exemption from his share of common burden in taxation must justify his claim by showing that the legislative intended to exempt him by words too plain to be mistaken.

It is a well-settled rule that he who claims exemption should prove that he is exempted.

General Course for Revenue Officers

TMD

GPT 210 Slide 81

Principles Governing Tax Exemption Tax exemptions must be strictly construed such that the exemption will
Principles Governing Tax Exemption Tax exemptions must be strictly construed such that the exemption will

Principles Governing Tax Exemption

Principles Governing Tax Exemption Tax exemptions must be strictly construed such that the exemption will not
Principles Governing Tax Exemption Tax exemptions must be strictly construed such that the exemption will not

Tax exemptions must be strictly construed such that the exemption will not be held to be conferred unless the terms under which it is granted clearly and distinctly show that such was the intention of the parties.

Constitutional grant of tax-exemptions are self- executing. The reason for this is that a constitutional provision declaring certain properties as tax-exempt does not need a legislative enactment to put it into effect.

General Course for Revenue Officers

TMD

GPT 210 Slide 82

BIR Mission Our mission is to raise revenues for the government through effective and efficient
BIR Mission Our mission is to raise revenues for the government through effective and efficient

BIR Mission

BIR Mission Our mission is to raise revenues for the government through effective and efficient collection
BIR Mission Our mission is to raise revenues for the government through effective and efficient collection

Our mission is to raise revenues for the government through effective and efficient collection of taxes, quality service to taxpayers, and impartial and uniform enforcement of tax laws.

General Course for Revenue Officers

TMD

GPT 210 Slide 83

Our Vision of the New BIR Taxpayers satisfied with BIR services An agency that is
Our Vision of the New BIR Taxpayers satisfied with BIR services An agency that is

Our Vision of the New BIR

Our Vision of the New BIR Taxpayers satisfied with BIR services An agency that is taxpayer-focused,
Our Vision of the New BIR Taxpayers satisfied with BIR services An agency that is taxpayer-focused,

Taxpayers satisfied with BIR services

An agency that is taxpayer-focused, efficient and transparent

An organization that is streamlined, productive and has fiscal and administrative flexibility

A workforce that is professional, competent, morally upright and motivated

A model of good governance in the public sector

General Course for Revenue Officers

TMD

GPT 210 Slide 84

Functions of the BIR Assessment and collection of all national internal taxes, fees and charges;
Functions of the BIR Assessment and collection of all national internal taxes, fees and charges;

Functions of the BIR

Functions of the BIR Assessment and collection of all national internal taxes, fees and charges; Execution
Functions of the BIR Assessment and collection of all national internal taxes, fees and charges; Execution

Assessment and collection of all national internal taxes, fees and charges; Execution of judgments decided in its favor by the Supreme Court, the Court of Tax Appeals, and the ordinary courts; Enforcement of penalties and fines as well as forfeitures; and Exercise power administrative and supervisory powers over taxpayers including promulgation of pertinent rulings.

General Course for Revenue Officers

TMD

GPT 210 Slide 85

Powers of the Commissioner of Internal Revenue ➣ Interpret tax laws and decide tax cases.
Powers of the Commissioner of Internal Revenue ➣ Interpret tax laws and decide tax cases.

Powers of the Commissioner of Internal Revenue

Powers of the Commissioner of Internal Revenue ➣ Interpret tax laws and decide tax cases. ➣
Powers of the Commissioner of Internal Revenue ➣ Interpret tax laws and decide tax cases. ➣

Interpret tax laws and decide tax cases.

Obtain information, summon, examine, and take testimony of persons for purposes of ascertaining the correctness of any return, or in making a return when none has been made, or in evaluating tax compliance.

Make

assessments

requirements

enforcement.

for

tax

and

prescribe additional

and

administration

Compromise, abate, refund or credit taxes.

General Course for Revenue Officers

TMD

GPT 210 Slide 86

Powers of the Commissioner of Internal Revenue ➣ Make arrests and seizures for violation of
Powers of the Commissioner of Internal Revenue ➣ Make arrests and seizures for violation of

Powers of the Commissioner of Internal Revenue

Powers of the Commissioner of Internal Revenue ➣ Make arrests and seizures for violation of any
Powers of the Commissioner of Internal Revenue ➣ Make arrests and seizures for violation of any

Make arrests and seizures for violation of any penal law, rules and regulations administered by the BIR.

Assign internal Revenue Officers involved in excise tax functions to establishments where articles subject to excise tax are produced or kept.

Assign or reassign Revenue Officers and employees of the BIR to other special duties connected with the enforcement or administration of revenue laws as the exigencies of the service may require, subject to the rules and promulgated by the Civil Service Commission and the Secretary of Finance.

General Course for Revenue Officers

TMD

GPT 210 Slide 87

Powers of the Commissioner of Internal Revenue ➣ Suspend business operations and temporarily close the
Powers of the Commissioner of Internal Revenue ➣ Suspend business operations and temporarily close the

Powers of the Commissioner of Internal Revenue

Powers of the Commissioner of Internal Revenue ➣ Suspend business operations and temporarily close the business
Powers of the Commissioner of Internal Revenue ➣ Suspend business operations and temporarily close the business

Suspend business operations and temporarily close the business establishments of any person for violations of certain provisions of the Tax Code.

Enter any house, building, or place where articles subject to tax are produced or kept, or are believed to be carrying articles on which excise tax has not been paid.

Detain any package containing or supposed to contain articles subject to excise tax that are believed to be illegally removed from place of production or customs custody.

General Course for Revenue Officers

TMD

GPT 210 Slide 88

Powers of the Commissioner of Internal Revenue ➣ dminister oath and take testimony related to
Powers of the Commissioner of Internal Revenue ➣ dminister oath and take testimony related to

Powers of the Commissioner of Internal Revenue

Powers of the Commissioner of Internal Revenue ➣ dminister oath and take testimony related to the
Powers of the Commissioner of Internal Revenue ➣ dminister oath and take testimony related to the

dminister oath and take testimony related to the investigation conducted in matters within the jurisdiction of the BIR.

Enforce civil remedies and statutory penalties for the collection of delinquent taxes.

Recommend

promulgation of rules and regulations for the effective enforcement of the provisions of the tax laws.

Delegate powers to subordinate officials with the rank equivalent to a Division Chief or higher subject to such limitations to be promulgated by the Secretary of Finance, upon recommendation of the CIR .

Finance the

to

the

Secretary

of

General Course for Revenue Officers

TMD

GPT 210 Slide 89

Duties of the Commissioner of Internal Revenue Ensures the provision and distribution of forms,
Duties of the Commissioner of Internal Revenue Ensures the provision and distribution of forms,

Duties of the Commissioner of Internal Revenue

Duties of the Commissioner of Internal Revenue Ensures the provision and distribution of forms,
Duties of the Commissioner of Internal Revenue Ensures the provision and distribution of forms,

Ensures

the

provision

and

distribution

of

forms,

receipts, certificates

and

appliances

and

acknowledgment of payment of taxes.

Divide the Philippines into such number of revenue districts as may from time to time be required for administrative purposes, subject for approval of the Secretary of Finance.

Prepares Annual Report containing detailed statements of the collections of the BIR with specifications of the sources of revenue by tax type, by manner of payment, by revenue region, and by industry group, and its disbursements by classes of expenditures. TMD

General Course for Revenue Officers

GPT 210 Slide 90

Duties of the Commissioner of Internal Revenue Furnishes appropriate Committee of Congress, in aid of
Duties of the Commissioner of Internal Revenue Furnishes appropriate Committee of Congress, in aid of

Duties of the Commissioner of Internal Revenue

Duties of the Commissioner of Internal Revenue Furnishes appropriate Committee of Congress, in aid of legislation,
Duties of the Commissioner of Internal Revenue Furnishes appropriate Committee of Congress, in aid of legislation,

Furnishes appropriate Committee of Congress, in aid of legislation, pertinent information such as industry audits, collection performance data, status reports in criminal actions initiated against persons, and taxpayer’s return.

Submits pertinent

information report

required by

Congressional Oversight Committee every six (6)

months of each calendar year.

General Course for Revenue Officers

TMD

GPT 210 Slide 91

Definition of Assessment Assessment is the official action of an authorized internal revenue officer in
Definition of Assessment Assessment is the official action of an authorized internal revenue officer in

Definition of Assessment

Definition of Assessment Assessment is the official action of an authorized internal revenue officer in ascertaining
Definition of Assessment Assessment is the official action of an authorized internal revenue officer in ascertaining

Assessment is the official action of an authorized internal revenue officer in ascertaining the amount of tax due from a taxpayer, or it may be a notice to the effect that the amount stated therein is due from the taxpayer as a tax with a demand for payment of the tax or deficiency stated therein . The action necessarily involves:

• Determination and computation of the sum due;

• Giving of notice to that effect to the taxpayer; and

• Issuance of a demand notice (simultaneously with or sometimes after, the deficiency notice).

General Course for Revenue Officers

TMD

GPT 210 Slide 92

Assessment may be classified as follows: Self - Assessment Deficiency Assessment Illegal and Void Assessment
Assessment may be classified as follows: Self - Assessment Deficiency Assessment Illegal and Void Assessment

Assessment may be classified as follows:

Assessment may be classified as follows: Self - Assessment Deficiency Assessment Illegal and Void Assessment Erroneous
Assessment may be classified as follows: Self - Assessment Deficiency Assessment Illegal and Void Assessment Erroneous

Self - Assessment

Deficiency Assessment

Illegal and Void Assessment

Erroneous Assessment

General Course for Revenue Officers

TMD

GPT 210 Slide 93

Principles Governing Tax Assessment Assessments are prima facie presumed correct and made in good faith.
Principles Governing Tax Assessment Assessments are prima facie presumed correct and made in good faith.

Principles Governing Tax Assessment

Principles Governing Tax Assessment Assessments are prima facie presumed correct and made in good faith. Assessment
Principles Governing Tax Assessment Assessments are prima facie presumed correct and made in good faith. Assessment

Assessments are prima facie presumed correct and made in good faith.

Assessment should not be based on presumptions no matter how logical the presumptions might be.

Assessment

is

discretionary

on the part of the

Commissioner.

 

The authority vested in the CIR to assess taxes may be delegated.

Assessment must be directed to the right party.

General Course for Revenue Officers

TMD

GPT 210 Slide 94

Means Employed in the Assessment of Taxes Examination of returns and determination of tax due;
Means Employed in the Assessment of Taxes Examination of returns and determination of tax due;

Means Employed in the Assessment of Taxes

Means Employed in the Assessment of Taxes Examination of returns and determination of tax due; Use
Means Employed in the Assessment of Taxes Examination of returns and determination of tax due; Use

Examination of returns and determination of tax due;

Use of best evidence obtainable;

Authority to conduct inventory-

taking, surveillance and

prescribe presumptive gross sales and receipts;

Authority to terminate taxable period;

Authority to prescribe real property values;

Authority to inquire into bank deposit accounts;

Authority to accredit and register tax agents; and

Authority to prescribe additional procedural or documentary requirements.

General Course for Revenue Officers

TMD

GPT 210 Slide 95

Prescriptive Periods for the Right to Assess General rule - Internal revenue taxes shall be
Prescriptive Periods for the Right to Assess General rule - Internal revenue taxes shall be

Prescriptive Periods for the Right to Assess

Prescriptive Periods for the Right to Assess General rule - Internal revenue taxes shall be assessed
Prescriptive Periods for the Right to Assess General rule - Internal revenue taxes shall be assessed

General rule- Internal revenue taxes shall be assessed within three (3) years after the last day prescribed by law for the filing of the return, and no proceeding in court without assessment for the collection of such taxes shall begin after the expiration of such period. However, in case where a return is filed beyond the period prescribed by law, the three-year period shall be counted from the day the return was filed. A return filed before the last day prescribed by law for the filing thereof, is considered as filed on such last day.

General Course for Revenue Officers

TMD

GPT 210 Slide 96

Considerations on the prescription of government’s right to assess taxes Date of Filing Tax Returns
Considerations on the prescription of government’s right to assess taxes Date of Filing Tax Returns

Considerations on the prescription of government’s right to assess taxes

on the prescription of government’s right to assess taxes Date of Filing Tax Returns Effect of
on the prescription of government’s right to assess taxes Date of Filing Tax Returns Effect of

Date of Filing Tax Returns

Effect of Filing An Amended Return

Effect of Filing A Wrong Return

Period Applicable when the Law does not Require the Filing of any Return

Applicable Prescriptive Period if Taxpayer Fails to File a Return

Prescriptive Period of Assessment when there is Fraud

General Course for Revenue Officers

TMD

GPT 210 Slide 97

Determination of Deficiency Tax Assessment Audit of Tax Returns Basis of Audit of Returns Frequency
Determination of Deficiency Tax Assessment Audit of Tax Returns Basis of Audit of Returns Frequency

Determination of Deficiency Tax Assessment

Determination of Deficiency Tax Assessment Audit of Tax Returns Basis of Audit of Returns Frequency of
Determination of Deficiency Tax Assessment Audit of Tax Returns Basis of Audit of Returns Frequency of

Audit of Tax Returns

Basis of Audit of Returns

Frequency of Audit

Submission of Audit Report

General Course for Revenue Officers

TMD

GPT 210 Slide 98

Prescription of Government's Right to Collect Taxes Law governing prescription of collection. When does the
Prescription of Government's Right to Collect Taxes Law governing prescription of collection. When does the

Prescription of Government's Right to Collect Taxes

Prescription of Government's Right to Collect Taxes Law governing prescription of collection. When does the five
Prescription of Government's Right to Collect Taxes Law governing prescription of collection. When does the five

Law governing prescription of collection.

When does the five (5) years prescription period for collection start to run.

When tax is deemed collected for purposes of the prescriptive period.

May there be a judicial action to collect a tax liability even if there is no previous assessment.

Prescription of the government’s right to recover erroneously refunded tax.

an

Waiver of the Statute of Limitations – Extension of the prescriptive period.

General Course for Revenue Officers

TMD

GPT 210 Slide 99

Mode of Procedures in the Issuance of Assessment Notice ✍ Post-Reporting Notice- sent to the
Mode of Procedures in the Issuance of Assessment Notice ✍ Post-Reporting Notice- sent to the

Mode of Procedures in the Issuance of Assessment Notice

Mode of Procedures in the Issuance of Assessment Notice ✍ Post-Reporting Notice- sent to the taxpayer
Mode of Procedures in the Issuance of Assessment Notice ✍ Post-Reporting Notice- sent to the taxpayer

Post-Reporting Notice- sent to the taxpayer by the Revenue Officer or by the Division Chief concerned (in the case of the BIR National Office) of the discrepancy or discrepancies in the taxpayer’s payment of his internal revenue taxes for an informal conference in order to afford the taxpayer with an opportunity to present his side of the case before forwarding the report to higher authorities for approval.

General Course for Revenue Officers

TMD

GPT 210 Slide 100

Mode of Procedures in the Issuance of Assessment Notice ✍ Pre- Assessment Notice (PAN)-if after
Mode of Procedures in the Issuance of Assessment Notice ✍ Pre- Assessment Notice (PAN)-if after

Mode of Procedures in the Issuance of Assessment Notice

Mode of Procedures in the Issuance of Assessment Notice ✍ Pre- Assessment Notice (PAN)-if after review
Mode of Procedures in the Issuance of Assessment Notice ✍ Pre- Assessment Notice (PAN)-if after review

Pre- Assessment Notice (PAN)-if after review and evaluation by the proper authorities, as the case maybe, it is determined that there exists sufficient basis to assess the taxpayer for any deficiency taxes, the said office shall issue to the taxpayer, at least by REGISTERED MAIL, a PAN for the proposed assessment showing in details the following:

Facts and the law;

Rules and regulations; or

 

Jurisprudence on is based.

which

the

proposed

assessment

General Course for Revenue Officers

TMD

GPT 210 Slide 101

Mode of Procedures in the Issuance of Assessment Notice ✍ Final Assessment Notice (FAN) -the
Mode of Procedures in the Issuance of Assessment Notice ✍ Final Assessment Notice (FAN) -the

Mode of Procedures in the Issuance of Assessment Notice

Mode of Procedures in the Issuance of Assessment Notice ✍ Final Assessment Notice (FAN) -the formal
Mode of Procedures in the Issuance of Assessment Notice ✍ Final Assessment Notice (FAN) -the formal

Final Assessment Notice (FAN) -the formal letter of demand and assessment notice shall be issued by the Commissioner or his duly authorized representative. The letter of demand calling for the payment of the taxpayer’s deficiency taxes shall state the facts, the law, rules and regulations or jurisprudence on which the assessment is based. The same shall be sent to the taxpayer only by registered mail or by personal delivery.

General Course for Revenue Officers

TMD

GPT 210 Slide 102

Protest to Assessment Administrative Protest of Assessment ➠ Request for reconsideration ➠ Request for
Protest to Assessment Administrative Protest of Assessment ➠ Request for reconsideration ➠ Request for

Protest to Assessment

Protest to Assessment Administrative Protest of Assessment ➠ Request for reconsideration ➠ Request for
Protest to Assessment Administrative Protest of Assessment ➠ Request for reconsideration ➠ Request for

Administrative Protest of Assessment Request for reconsideration Request for reinvestigation

Judicial protest Appeal to the Court of Tax Appeals Appeal to the Court of Appeals Appeal to the Supreme Court

Writ of execution of judgment

General Course for Revenue Officers

TMD

GPT 210 Slide 103