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Summary - January 17, 2018

This document discusses concepts related to taxation. It defines taxation as the power of an independent state to raise revenue from its inhabitants to pay for necessary government expenses through laws passed by its legislative body. Taxation involves imposing charges on individuals, property, or transactions. It is considered both an inherent power of sovereignty and an essential legislative function. Taxes must be collected and used for public purposes. The power of taxation allows a government to function and is subject to constitutional and inherent limitations. The document contrasts taxation with other inherent state powers like police power and eminent domain.

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Ken Pio
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51 views4 pages

Summary - January 17, 2018

This document discusses concepts related to taxation. It defines taxation as the power of an independent state to raise revenue from its inhabitants to pay for necessary government expenses through laws passed by its legislative body. Taxation involves imposing charges on individuals, property, or transactions. It is considered both an inherent power of sovereignty and an essential legislative function. Taxes must be collected and used for public purposes. The power of taxation allows a government to function and is subject to constitutional and inherent limitations. The document contrasts taxation with other inherent state powers like police power and eminent domain.

Uploaded by

Ken Pio
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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A Taxation in General

I. Concepts
a. Taxation
i. Definition
as a power

by which an independent state, through its law-making body, raises


and accumulates revenue from its inhabitants to pay the necessary
expenses of the government; inherent power of a state, coextensive
with sovereignty to demand contributions

as a process

of imposing a charge by gov’t authority on property, individuals,


or transactions to raise money for public purposes; enactment of
tax laws by the Congress which will be implemented by the
Executive Branch through BIR to raise revenue in order to pay the
necessary expenses of the government

as a means

by which the Sovereign State through its law-making body, demands


for revenue in order to supports its existence and carry out
legitimate objectives; collection and appropriation of cost to
those entitles to its benefits.

ii. Nature of the power of taxation


1. Inherent power of sovereignty;

Existence commences concurrently with the four elements of


state (people, territory, sovereignty and government)
Sovereign government can enforce contribution even without
a specific provision in the Constitution authorizing it.

Only the NATIONAL GOVERNMENT (NOT LOCAL) exercises the


inherent power of taxation of the state. UNLESS, (1) there
is an expressed Constitutional provision granting them the
power to tax; (2) valid delegation of tax power through the
statute from the national legislature…

2. Essentially a legislative function;

The law-making body of the government exercise the power of


taxation. Congress have the power to enact laws and
ordinances, and impose the collection of taxes.

Scope of legislative taxing power:


 Subjects of taxation: (1)Persons; (2)Property;
(3)Rights; (4)Transactions; (5)Occupation;etc.
 Amount or rate of the tax
 Purposes of tax (public purposes)
 Apportionment of tax
 Situs of taxation; and
 Method of tax collection
The power to make tax laws cannot be delegated to other
branches of the government. If the powers delegated are
ministerial and advisory (power to value property, assess
and collect), they are allowed since they are only
administrative in nature, not legislative.

Distinguishing between tax delegation and tax


administration.

3. For public purposes;

Public taxes are public money—they must be used to finance


recognized public needs (finance constructions and
maintenance of roads; health care, education, security,
promotion of science, commerce, industry, and others) for
the welfare of the general public.

Public purpose- for the welfare of the nation, no other


reason for appropriation of tax

Tax utilized for public purpose if welfare of the nation or


the greater portion of its population has benefited its
use.

4. Territorial in operation;

Taxing authorities must observe tax situs because the


country’s tax laws are effective and enforceable only
within its territorial limits.

Privity of relationship – implies contractual support or


duty of care afforded by the Gov’t to its citizen residing
outside the country.
If privity of relationship exists, the state can still
exercise its taxing powers over its citizen outside its
territory.

International Comity – courteous recognition, friendly


agreement, interaction and respect accorded by one nation
to the laws and institutions of another. (example, tax
exemption of properties used by diplomats in the exercise
of sovereign powers and diplomatic function)

5. Tax exemption of government;

Grant of tax immunity to a particular class of persons or


corporations

Only applies to government entities through which the


government immediately and directly exercises its
governmental functions like the AFP. (unless expressly
taxed)

However, if they are performing proprietary functions like


PNR, they are generally subject to tax in the absence of
tax exemption provisions in their charters or the law
creating them
6. The strongest among the inherent powers of the
government; and

Taxation – strongest of all inherent powers, because gov’t


can’t survive nor dispense any of its powers and functions
effectively.

7. Subject to Constitutional and inherent limitations


iii. Purposes

Revenue Purpose
Primary purpose of taxation is to raise revenue by collecting
funds or property for the support of the government in promoting
the general welfare and protecting its inhabitants.

Regulatory Purpose
AKA Sumptuary, objective is accomplished to:
(1) Regulate inflation
- To curve spending power and minimize inflation in times of
prosperity. It can also be reduced to expand business and
ward off depression in times of delicining economic
conditions
(2) Achieve economic and social stability, and
- To encourage econ growth by granting tax exemptions, tax
relief and incentives, which could attract investments and
create employment.
- International relations
(3) Serve as key instrument for social control
-

iv. Underlying theory and basis


v. Aspects/ stages
vi. Scope
vii. As distinguished from other inherent powers of the State

Sovereign state’s indispensable powers necessary for survival.


Essential force in order that a government can command, maintain
peace and order, and survive, irrespective of any Constitutional
provision

1. Police Power

Inherent power of the sovereign state to legislate for the


protection of health, welfare and morals of the community.
(guard against excesses or abuses of individual liberty.)
This power is restricted by the “due process clause” of the
Constitution

Police Power of the State may be exercised through taxation


because taxes may be levied for the promotion of the
welfare of the public

Examples: preservation of natural resources, segregation of


lepers from the public, imprisonment of convicted
criminals, and regulation of various professions
2. Eminent Domain

Power of the sovereign state to take private property for


public purposes.
Founded upon the idea: common necessities and interests of
the community transcend individual rights in property.

Constitutional limits of the exercise of this power –


providing that property may not be taken without just
compensation.

Just Compensation means paying the owner the full monetary


equivalent of the property taken for public use.

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