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TAXATION LAW REVIEW
From the Lectures of Atty. Manuel P. Quibod, CPA
4 Manresa | SY 2020-2021
ACCOUNTABILITY CHECK Issue: W/N the tax deduction scheme is a legitimate exercise
November 24, 2020 | Cavin Jhon Cabarlo of the State‟s police power
HEADING; ARIAL 12 Ruling: Yes. Please provide for a categorical answer. Don’t let
GENERAL OVERVIEW the reader decipher.
The 20% senior citizen discount is an exercise of police power.
SUBHEADING; ARIAL 10
The 20% discount is intended to improve the welfare of senior
DEFINITION OF TAXATION citizens who, at their age, are less likely to be gainfully
employed, more prone to illnesses and other disabilities, and,
BODY; ARIAL 9 thus, in need of subsidy in purchasing basic commodities. As
Taxation is defined as the power of the sovereign to impose to its nature and effects, the 20% discount is a regulation
burdens or charges upon persons, property or property rights affecting the ability of private establishments to price their
for the use and support of the government to discharge its products and services relative to a special class of individuals,
functions. senior citizens, for which the Constitution affords preferential
concern. In turn, this affects the amount of profits or
income/gross sales that a private establishment
OBJECT OF TAXATION can derive from senior citizens. In other words, the subject
1. Persons regulation affects the pricing, and, hence, the profitability of a
2. Property private establishment.
3. Property Rights
Please copy the exact and relevant ruling. Let us not confuse
ourselves more with non-value adding ruling.
STAGES OR PHASES OF TAXATION
1. Levying – Legislative in character.
2. Collection – Tax administration
COMPARISONS
DISTINCTIONS/COMPARISONS
PROGRESSIVE SYSTEM OF TAXATION CRITERIA TAXATION
POLICE EMINENT
POWER DOMAIN
The Progressive System is a mandate provided by the Service and
constitution that there shall always be a progressive system of Compensatio protection Peaceful Just
taxation. n from the Society Compensation
government
PROBLEMS AND BAR QUESTIONS
Problem: Is the progressive system of taxation constitutionally Non-
mandated? Impairment Inferior to NIC
Superior to NIC
Clause (NIC)
Answer: The 1987 Constitution provides that the Congress
shall evolve a progressive system of taxation. The Congress is
merely directed to adopt a system of more direct taxes than PROVISIONS
indirect taxes. Section 32. Gross Income. –
CASE DIGESTS (A) General Definition. - Except when otherwise
MANILA MEMORIAL PARK v. DSWD provided in this Title, gross income means all income
G.R. No. 175356, December 3, 2013 derived from whatever source, including (but not
limited to) the following items:
Facts: Manila Memorial Park, Inc. and La Funeraria Paz- (1) Compensation for services in whatever form
Sucat, Inc. are domestic corporations engaged in the business
paid, including, but not limited to fees, salaries,
of providing funeral and burial services. They assail the
constitutionality of Section 4 of RA 7432,as amended by RA wages, commissions, and similar items;
9257,and the implementing rules and regulations issued by the (2) Gross income derived from the conduct of trade
DSWD and DOF or business or the exercise of a profession;
insofar as these allow business establishments to claim the (3) Gains derived from dealings in property;
20% discount given to senior citizens as a tax deduction. (4) Interests;
(5) Rents;
(6) Royalties;
Please summarize the facts. 1-2 paragraphs if possible. Only
(7) Dividends;
include relevant facts.
(8) Annuities;
(9) Prizes and winnings;
Names of Contributors
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TAXATION LAW REVIEW
From the Lectures of Atty. Manuel P. Quibod, CPA
4 Manresa | SY 2020-2021
(10) Pensions; and 1. Compensation for services in whatever form
(11) Partner's distributive share from the net income paid including, but not limited to fees, salaries,
of the general professional partnership. wages, commissions, and similar items;
Explain. When you transcribe, please transform it into English. If
GROSS INCOME you are not sure, consult reviewers, golden notes or past TSNs. As
much as we want jokes, do not include those.
Gross income are all income derived fom whatever source
except when otherwise provided in the NIRC. 2. Gross income derived from the conduct of trade
or business or the exercise of a profession;
Explain.
Explain.
PROCEDURE; USE DRAWING CANVAS &
FORMAT BELOW
Preliminary Final Assessment
Letter of 30 days 15 days
Notice of Informal Assessment Notice Reply Notice
Authority Conference
Pre Pre
Names of Contributors
