taxes and various terminologies

a presentation for econ 20.1 eda

terminologies terminologies terminologies terminologies terminologies

Revenue refers to the amount collected, while tax refers to the amount imposed. Internal revenue taxes paid by the government other than imports and exports.
duties on

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Customs duties taxes imposed on goods exported from/imported into

the country.

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Tariff a list containing names of merchandise together with their responding payments. duties payable on goods imported or exported. a system or principle of imposing duties on the import/export of goods.

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Debt - Generally based on contract. - It is assignable. - Can be paid in kind. - Person with debt cannot be imprisoned.

Tax - Generally based on law. - Cannot be assigned. - Is generally paid in money. - Imprisonment is sanctioned for nonpayment.

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Toll the sum of money for the use something.

of

License / Permit fee charged under police power of the state for the purpose of regulation.
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License Fee - Is imposed for regulation. - Involves police power. - Limited to the necessary expenses.

Tax - Is levied for revenues. - Involves taxingpower. - Unlimited on the amount of tax that may be imposed.

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Penalty sanction imposed as a punishment for violation of law deemed harmful.

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Penalty

Tax

- Designed to regulate - Aimed to raise conduct. revenue. - May be imposed by - Imposed only by the either government or government. private entities.

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Kinds of Taxes Under Existing Laws:

1. National Taxes imposed by the National Government under the National Internal Revenue Code and other laws particularly the Tariff and Customs Code. 2. Local Taxes imposed by the local governments to meet particular needs under the Local Government Code, such as real property tax and community tax.

Kinds of National Internal Revenue Taxes:

1. Income Taxes it is a tax on a persons income, profits and the like realized in one taxation year. It is imposed at gradual rates having one set for employment income and another for professional income.

Kinds of National Internal Revenue Taxes:

2. Estate and Inheritance Tax it is a tax on the right of the deceased person to transfer his estate to his lawful beneficiaries. It is no longer imposed. Also known as privilege tax.

Kinds of National Internal Revenue Taxes:

3. Donors Tax imposed on the transfer without consideration of property or money between two or more persons who are living at the time the transfer is made. Donors Taxes are: i. Levied on the act of giving. ii. Levied on the act of receiving.

Kinds of National Internal Revenue Taxes:

4. Value-added Tax (VAT) is a percentage tax imposed on every sale/import of goods or services based on the gross selling price or gross receipts, payable by the seller/importer of goods, or the person engaged in the sale of services.

5. Other Percentage Taxes - based on percentages of the gross selling price.

Kinds of National Internal Revenue Taxes:

6. Excise Tax used in the Tax Code; taxes imposed on certain specified goods manufactured in the country for domestic sale or for any other disposition and on goods imported into the country. Kinds of Excise Tax: i. Specific tax imposed based on weight, volume or any physical unit of measurement. ii. Ad valorem tax imposed on the price.

Kinds of National Internal Revenue Taxes:

7. Documentary Stamp Tax tax on documents, papers evidencing the acceptance, assignment, sale/transfer of an obligation, right/property incident thereto.

Kinds of National Internal Revenue Taxes:

Documents subject to tax are: Bonds, debentures and certificates of indebtedness; Original issue of certificates stock; Sales contracts or agreements; Negotiable promissory notes and bills of exchange; Insurance policies; Power of attorney; and Leases, mortgages and pledges.

Kinds of National Internal Revenue Taxes:

8. Other taxes are or hereafter may imposed and collected by the Bureau of Internal Revenue (BIR).

National Taxes Imposed by Special Laws:

a. Customs Duties taxes levied by the government on the importation/exportation of goods in/out of the country.

b. Travel Tax used in line with policy of the government to lessen the restriction of foreign travel and simplify travel regulations and provide adequate funds for government programs.

National Taxes Imposed by Special Laws:

c. Energy Tax imposed on the view of (1) the need to discourage the uneconomic consumption of fuel and (2) the need for additional revenue to support economic development. d. Private Motor Vehicle Tax imposed by EO No. 43 which amended RA No. 4136, also known as the Land Transportation And Traffic Code; rationalized to impose tax on private vehicles by basing the same on the ability to pay of the owners.

income tax calculation

how to solve for the income tax

Income tax includes all wealth that a taxpayer has and not just a mere return on capital.

Income tax regarded as a privilege tax and not a tax on property; tax on the privilege to earn an income; purpose is to raise revenue.
Gross income includes all income except for the exempt income and the income subject to final income tax.

Examples of Gross Income are:

Salaries, wages for services including fees, commissions, and similar items and those derived from business or professional, sale of and other dealings in property, interest, rents dividends and securities. Gambling and illegal transactions are included.

Taxable income is calculated:

gross income
(income before tax is applied)

deductions allowed by law

(ex. Private and government loans, etc.)

Personal and Additional Exemptions Allowable to Individuals:

RA 9504 to provide financial relief to taxpayers of the hard times brought by multiple factors. To help reduce the wide tax gap in the taxation of self-employed and professionals.

Personal and Additional Exemptions Allowable to Individuals: Sec. 35a it shall be allowed a basic personal exemption amounting to Php50,000 for each individual taxpayer. Sec. 35b - there shall be allowed an additional exemption of Php25,000 for each dependent not exceeding 4.

Personal and Additional Exemptions Allowable to Individuals:

Special Cases: Legally separated spouses additional exemptions may be claimed only by the spouse who has custody of the child or children. Provided that both shall not exceed the maximum exemptions allowed.

Personal and Additional Exemptions Allowable to Individuals: Dependent Child legitimate, illegitimate or legally adopted child chiefly dependent upon and living with the taxpayer who is not more than 21 years old, unmarried and not employed, and/or is incapable of self-support because of mental/physical defect, regardless of age.

Personal and Additional Exemptions Allowable to Individuals: Recognized child is one born outside of wedlock between a couple, who at the time of the conception of the child, were legally free to marry each other, and is recognized by one or both parents.

computation of { tax compensation income

Total Gross Compensation Income from all sources LESS: Personal and Additional Exemptions ____________________________________ ___ =Taxable Compensation Income MULTIPLIED BY: Graduated Tax Rate in Sec.31a of the Tax Code
____________________________________ ___

Tax Table Not over Php10,000 Php10,001 Php30,000 Php30,001 Php70,000 Php70,001 Php140,000 Php140,001 Php250,000 Php250,001 Php500,000 Over Php500,000 5%

Tax Due Php500 + 10% of excess over Php10,000 Php2,500 + 15% of excess over Php30,000 Php8,500 + 20% of excess over Php70,000 Php22,500 + 25% of excess over Php140,000 Php50,000 + 30% of excess over Php250,000 Php125,000 + 34% of excess over Php500,000

Tax Table Not over Php10,000 Php10,001 Php30,000 Php30,001 Php70,000 Php70,001 Php140,000 Php140,001 Php250,000 Php250,001 Php500,000 Over Php500,000 5%

Tax Due Php500 + 10% of excess over Php10,000 Php2,500 + 15% of excess over Php30,000 Php8,500 + 20% of excess over Php70,000 Php22,500 + 25% of excess over Php140,000 Php50,000 + 30% of excess over Php250,000 Php125,000 + 34% of excess over Php500,000

Tax Table Not over Php10,000 Php10,001 Php30,000 Php30,001 Php70,000 Php70,001 Php140,000 Php140,001 Php250,000 Php250,001 Php500,000 Over Php500,000 5%

Tax Due Php500 + 10% of excess over Php10,000 Php2,500 + 15% of excess over Php30,000 Php8,500 + 20% of excess over Php70,000 Php22,500 + 25% of excess over Php140,000 Php50,000 + 30% of excess over Php250,000 Php125,000 + 34% of excess over Php500,000

Tax Table Not over Php10,000 Php10,001 Php30,000 Php30,001 Php70,000 Php70,001 Php140,000 Php140,001 Php250,000 Php250,001 Php500,000 Over Php500,000 5%

Tax Due Php500 + 10% of excess over Php10,000 Php2,500 + 15% of excess over Php30,000 Php8,500 + 20% of excess over Php70,000 Php22,500 + 25% of excess over Php140,000 Php50,000 + 30% of excess over Php250,000 Php125,000 + 34% of excess over Php500,000

Tax Table Not over Php10,000 Php10,001 Php30,000 Php30,001 Php70,000 Php70,001 Php140,000 Php140,001 Php250,000 Php250,001 Php500,000 Over Php500,000 5%

Tax Due Php500 + 10% of excess over Php10,000 Php2,500 + 15% of excess over Php30,000 Php8,500 + 20% of excess over Php70,000 Php22,500 + 25% of excess over Php140,000 Php50,000 + 30% of excess over Php250,000 Php125,000 + 34% of excess over Php500,000

Tax Table Not over Php10,000 Php10,001 Php30,000 Php30,001 Php70,000 Php70,001 Php140,000 Php140,001 Php250,000 Php250,001 Php500,000 Over Php500,000 5%

Tax Due Php500 + 10% of excess over Php10,000 Php2,500 + 15% of excess over Php30,000 Php8,500 + 20% of excess over Php70,000 Php22,500 + 25% of excess over Php140,000 Php50,000 + 30% of excess over Php250,000 Php125,000 + 34% of excess over Php500,000

Tax Table Not over Php10,000 Php10,001 Php30,000 Php30,001 Php70,000 Php70,001 Php140,000 Php140,001 Php250,000 Php250,001 Php500,000 Over Php500,000 5%

Tax Due Php500 + 10% of excess over Php10,000 Php2,500 + 15% of excess over Php30,000 Php8,500 + 20% of excess over Php70,000 Php22,500 + 25% of excess over Php140,000 Php50,000 + 30% of excess over Php250,000 Php125,000 + 34% of excess over Php500,000

Tax Table Not over Php10,000 Php10,001 Php30,000 Php30,001 Php70,000 Php70,001 Php140,000 Php140,001 Php250,000 Php250,001 Php500,000 Over Php500,000 5%

Tax Due Php500 + 10% of excess over Php10,000 Php2,500 + 15% of excess over Php30,000 Php8,500 + 20% of excess over Php70,000 Php22,500 + 25% of excess over Php140,000 Php50,000 + 30% of excess over Php250,000 Php125,000 + 34% of excess over Php500,000

Particulars A Salary (12months) B 13 Month Pay C Total Annual Income Deductions D SSS E Philhealth F Pag-ibig

Current Tax Code Php180,000 15,000 Php195,000

6,000 2,250 1,200

G Total Deductions
H After Deductions (C-G) Exemptions I 13th Month Pay up to Php30,000 J Personal Exemption (RA 9305) K Total Exemptions L Net Taxable Income (H-K) Tax Due M Fixed Tax N Additional Tax O Income Tax (M+N) Net Income Home Pay Php18,610 Php176,390 Php120,550 Php185,550

9,450

15,000 50,000 65,000

8,500 10,110

taxes and various terminologies

end of presentation for econ 20.1 eda questions and queries