[FABM2] Lesson 043 - Basic Taxation Principles [Tagalog]

Summary

In this lesson on basic taxation principles, the video explores the three inherent powers of the state—police power, eminent domain, and taxation. The focus is on taxation as the state's right to impose compulsory contributions for public purposes. The video further details various types of taxes in the Philippines, including income tax, VAT, capital gains tax, and donor’s tax, as well as the role of the Bureau of Internal Revenue (BIR) in tax collection. It concludes with a discussion on the Tax Reform for Acceleration and Inclusion (TRAIN) law and its impact on the national tax system.

Takeaways

• 😀 The three inherent powers of the state are police power, eminent domain, and the power of taxation.
• 😀 Police power allows the government to create laws for public safety, health, and welfare.
• 😀 Eminent domain gives the state the right to seize private property for public purposes, with just compensation.
• 😀 The power of taxation enables the government to collect funds for public services and nation-building.
• 😀 Taxation is compulsory and can be levied on both persons and property for public purposes.
• 😀 Taxes are enforced contributions collected at regular intervals (e.g., monthly, quarterly, annually).
• 😀 The Bureau of Internal Revenue (BIR) is the government agency responsible for tax collection in the Philippines.
• 😀 Republic Act 10963 (TRAIN Law) reformed the Philippine tax system, amending the National Internal Revenue Code (NIRC).
• 😀 Different types of taxes in the Philippines include capital gains tax, documentary stamp tax, and VAT (Value Added Tax).
• 😀 Income tax is imposed on profits or income earned from property, business, or profession, with separate rules for individuals and corporations.
• 😀 Donor's tax applies to gifts or donations over PHP 250,000 per year, and there are exemptions for smaller amounts.

Q & A

What are the three inherent powers of the state?

The three inherent powers of the state are police power, eminent domain, and taxation. These powers are natural to the state and essential for maintaining order and providing for the welfare of its citizens.

What is the purpose of police power?

Police power is the state's ability to enact laws that promote public safety, order, health, morals, education, and general welfare. It ensures that citizens feel safe and that societal needs are addressed.

What is eminent domain and how does it work?

Eminent domain allows the state to take private property for public purposes, such as constructing roads or other infrastructure, but it requires the payment of just compensation to the property owner.

What is the definition of taxation according to the video?

Taxation is the inherent power of the state to demand contributions from individuals and property owners to support government expenditures. These contributions are used for public purposes and are enforced by law.

Who is responsible for the assessment and collection of taxes in the Philippines?

The Bureau of Internal Revenue (BIR) is responsible for assessing and collecting national internal revenue taxes in the Philippines. It operates under the Department of Finance.

What are the characteristics of taxes?

Taxes are enforced contributions, payable in money, proportional in character, levied on persons or property, imposed by the law-making body of the state, and required to be paid at regular intervals, such as monthly, quarterly, or annually.

What is the tax rate for Value Added Tax (VAT) in the Philippines?

The current VAT rate in the Philippines is 12%. It is imposed on the sale of goods and services in the course of trade or business.

What is a capital gains tax?

Capital gains tax is a tax imposed on the gains realized from the sale, exchange, or disposition of capital assets, such as real estate or stocks.

What is the difference between donors tax and estate tax?

Donors tax is imposed on the transfer of property as a gift between living individuals, while estate tax is imposed on the transfer of a deceased person's estate to their heirs and beneficiaries.

What is the purpose of the TRAIN Law (Republic Act 10963)?

The TRAIN Law, or Tax Reform for Acceleration and Inclusion, was enacted to simplify and reform the tax system in the Philippines. It amended several provisions of the National Internal Revenue Code (Republic Act 8424) to improve tax collection and streamline the tax process.