Features of the Philippine Income Tax Law

A. Features of the Philippine Income Tax Law 1. Income tax is a direct tax because the tax burden is borne by the income recipient upon whom the tax is imposed. It is a tax demanded from the very person who, it is intended or desired, should pay it, while indirect tax is a tax demanded in the first instance from one person in the expectation and intention that he can shift the burden to someone else. 2. Income tax is a progressive tax, since the tax base increases as the tax rate increases. It is founded on the ability to pay principle and is consistent with the Constitutional provision that "Congress shall evolve a progressive system of taxation. 3. The Philippines has adopted the most comprehensive system of imposing income tax by adopting the citizenship principle, the residence principle, and the source principle. 4. The Philippines follows the semi-schedular or semi-global system of income taxation. 5. The Philippine income tax law is a law of American origin. Thus, the authoritative decisions of the U.S. courts and officials charged with enforcing the U.S. Internal Revenue Code have peculiar force and persuasive effect for the Philippines. The Tax Code is classified as civil in nature and not a political law; hence, it is enforced even during the enemy occupation (Hilado vs. Collector, 100 Phil. 288). Although penalties are provided for violations of the Tax Code, it is not a penal law (Lorenzo vs. Posadas, 64 Phil. 353).