INCOME TAXATION

GENERAL PRINCIPLES
TAXATION power inherent in every
sovereign
State to impose a charge or burden
upon persons, properties, or rights to
raise revenues for the use and support
of the government to enable it to
discharge its appropriate functions
TAX (ELEMENTS of TAX) [ P E P L I
G]
1. Proportionate
2. Enforced Contribution
3. Public Purpose
4. Levied by the State
5. Imposed by the State
6. Generally Payable in Money
SCOPE OF TAXATION [C U P S]
Comprehensive
Unlimited
Plenary
Supreme
Far-reaching***
STAGES / ASPECTS OF THE
EXERCISE OF TAXATION POWER
1. Levy
2. Assessment
3. Collection
BASIC PRINCIPLES OF A SOUND
TAX SYSTEM
1. Fiscal Adequacy
2. Theoretical Justice
3. Administrative Feasibility
Theory of Taxation the
governments necessity for funding

Basis of Taxation the mutuality of

support between the people and the
government
THEORIES OF COST ALLOCATION
Benefit Received Theory
the more benefit one receives from
the government, the more taxes he
should pay
Ability to Pay Theory
to contribute based on their
relative capacity to sacrifice for the
support of the government; those
who have less shall contribute less
even if they receive more of the
benefits from the government
ASPECTS:
Vertical Equity directly
proportional to the level of his
tax base; gross concept
Horizontal Equity requires
consideration of the particular
circumstance of the taxpayer;
net concept
*Lifeblood Doctrine without taxes,
the government would be paralyzed
for the lack of motive power to
activate or operate it
INHERENT POWERS OF THE STATE
1. Taxation
2. Police Power
3. Eminent Domain
INHERENT LIMITATIONS OF TAXATION
Territoriality
International Comity
Public Purpose
Exemption of the Government
Non-Delegation of the Taxing Power