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History of Taxation importance of taxation to the taxpayers and to the government Kinds and Characteristics of Taxes Taxation System in the Philippines
History
During the reign of Egyptian Pharaohs
Scribes as tax collectors
In Greece
A tax referred to as Eisphora was imposed only in times of war
In Athens
A monthly tax called Metoikon was collected to foreigners
In England
Taxes were first used as an emergency measure Taxes on income or capital were a recent development as a result of increasing government intervention in the economy
In the Philippines
The pre-colonial society, being communitarian, did not have taxes
Taxation
The system of compulsory contributions levied by a government or other qualified body on people, corporations and property in order to fund public expenditures. An inherent power of the state to raise income and to demand enforced contributions for public purposes.
Purposes Taxation
to raise revenues for public needs so that persons can live in a civilized society The government increase taxes in order to stabilize prices and stimulate greater production. An instrument of fiscal policy influences the direction and structure of money supply, investments, credits, production, interest rate, inflation, prices and in general, of the national economy
Effects of Taxation
Personal Income Tax which is presumed to fall entirely on the legal taxpayers influences decisions to work, save, and invest. These decisions affect other people. Corporate Income Tax may simply result to lower corporate profits and dividends. It may reduce their income of all owners of property and businesses. The company may move toward raising the prices of their products
Kinds of taxes
Income Tax
Tax on all yearly profits arising form property, possessions, trades or offices Tax on a persons income, emoluments and profits
Donors Tax
Tax imposed on donations inter-vivos or those made between living persons to take effect during the lifetime of the donor.
Estate Tax
Tax on the right of the deceased person to transmit property at death
Kinds of taxes
Value-added Tax (VAT)
Tax imposed and collected on every sale, barter, exchange or transaction deemed sale of taxable goods, properties, lease of goods, services or properties in the course of trade as they pass along the production and distribution chain
Kinds of taxes
Excise Tax
Tax applicable to specified goods manufactured in the Philippines for domestic sale or consumption
Specific tax: imposed on certain goods based on weight or volume capacity or any other physical unit of measurement (Specific tax = volume x tax rate) Alcohol products, petroleum products, tobacco products Ad valorem tax: imposed on certain goods based on selling price or other specified value of the goods (Ad valorem tax = selling price x tax rate) Mineral products, automobiles
Kinds of taxes
Documentary Tax
Tax on documents, instruments, loan agreements and papers, agreements evidencing the acceptance, assignments, sale or transfer of an obligation, rights or property incident thereto
Withholding tax
Expanded withholding tax:
A system of collecting taxes whereby the taxes withheld on certain income payments are intended to equal or at least approximate the tax due of the payer on said income.
Withholding tax
Final withholding tax:
A system of collecting taxes whereby the amount of income tax withheld by the withholding agent is constituted as a full payment of the income tax due form the payer on the said income. The payer is not required to file an income tax return for the particular income.
Withholding tax
Withholding tax for compensation income:
Commonly referred to as pay as you go or pay as you earn. A method of collecting the income tax at source upon receipt of the income.
Tax Evasion
When there is fraud through pretension and the use of other illegal devices to lessen ones taxes, there is tax evasion
Under-declaration of income Non-declaration of income and other items subject to tax Under-appraisal of goods subject to tariff Over-declaration of deductions
Assignment
Write your answer in a 1 whole sheet of paper 1. Define the following:
Poverty Poverty line Degradation