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Government projects and infrastructures are made possible 1) Collection of taxes cannot be enjoined by injunction.
through the availability of funds provided through taxation.
The government’s ability to serve and protect the people 2) Taxes could not be the subject of compensation or set off.
depends largely upon taxes. Taxes are what we pay for a
civilized society, [Commissioner v. Algue, 158 SCRA 9]. 3) A valid tax may result in the destruction of the taxpayer’s
property.
The lifeblood theory constitutes the theory of taxation, which NECESSITY THEORY
provides that the existence of government is a necessity; that
government cannot continue without means to pay its Taxation as stated in the case of Phil. Guaranty Co., Inc. v.
expenses; and that for these means it has a right to compel its Commissioner [13 SCRA 775], is a power predicated upon
citizens and property within its limits to contribute. necessity. It is a necessary burden to preserve the State’s
sovereignty and a means to give the citizenry an army to resist
In Commissioner v. Algue, the Supreme Court said that taxes aggression, a navy to defend its shores from invasion, a corps
are the lifeblood of the government and should be collected of civil servants to serve, public improvements for the
without necessary hindrance. They are what we pay for a enjoyment of the citizenry, and those which come within the
civilized society. Without taxes, the government would be State’s territory and facilities and protection which a
paralyzed for lack of motive power to activate and operate it. government is supposed to provide.
because in the absence of limitations, it is considered as
BENEFITS RECEIVED PRINCIPLE unlimited, plenary, comprehensive and supreme.
However, the power of taxation should be exercised
This theory bases the power of the State to demand and with caution to minimize injury to the proprietary rights of the
receive taxes on the reciprocal duties of support and taxpayer. It must be exercised fairly, equally, and uniformly,
protection. The citizen supports the State by paying the lest the tax collector kill “the hen that lays the golden egg”
portion from his property that is demanded in order that he [Roxas v. CTA, 23 SCRA 276].
may, by means thereof, be secured in the enjoyment of the
benefits of an organized society. Thus, the taxpayer cannot When is taxation considered as an implement of police power?
question the validity of the tax law on the ground that payment
of such tax will render him impoverished, or lessen his In Walter Lutz v. J. Antonio Araneta, 98 Phil 148, the
financial or social standing, because the obligation to pay SC upheld the validity of the tax law increasing the existing
taxes is involuntary and compulsory, in exchange for the tax on the manufacture of sugar. “The protection and
protection and benefits one receives from the government. promotion of the sugar industry is a matter of public concern;
the legislature may determine within reasonable bounds what
In return for his contribution, the taxpayer receives the general is necessary for its protection and expedient for its promotion.
advantages and protection which the government affords the If objective and methods alike are constitutionally valid, there
taxpayer and his property. One is compensation or is no reason why the state may not levy taxes to raise funds for
consideration for the other; protection for support and support their prosecution and attainment. Taxation may be made the
for protection. implement of the state’s police power.”
However, it does not mean that only those who are able to and In Tio v. Videogram Regulatory Board, 151 SCRA
do pay taxes can enjoy the privileges and protection given to a 208, the levy of a 30% tax under PD1987, was imposed
citizen by the government. primarily for answering the need for regulating the video
industry, particularly the rampant film piracy, the flagrant
In fact, from the contribution received, the government violation of intellectual property rights, and the proliferation
renders no special or commensurate benefit to any particular of pornographic videotapes, and is therefore valid. While the
property or person. The only benefit to which the taxpayer is direct beneficiaries of the said decree is the movie industry,
entitled is that derived from the enjoyment of the privilege of the citizens are held to be its indirect beneficiaries.
living in an organized society established and safeguarded by
the devotion of taxes to public purpose. The government What is the concept of fiscal adequacy?
promises nothing to the person taxed beyond what may be
anticipated from an administration of the laws for the general That the sources of revenues must be adequate to meet
good, [Lorenzo v. Posadas]. government expenditures, [Chavez v. Ongpin, 186 SCRA
331].
Taxes are essential to the existence of the government. The
obligation to pay taxes rests not upon the privileges enjoyed
by or the protection afforded to the citizen by the government,
but upon the necessity of money for the support of the State.
For this reason, no one is allowed to object to or resist
payment of taxes solely because no personal benefit to him
can be pointed out as arising from the tax, [Lorenzo v.
Posadas].
DOCTRINE OF SYMBIOTIC RELATIONSHIP