Escolar Documentos
Profissional Documentos
Cultura Documentos
Vitug and Acosta select the subject of taxation, and it has been repeatedly
held that “inequities” which result from a singling out of
PART I – GENERAL PRINCIPLES one particular class for taxation or exemption infringes no
constitutional limitation.
A. Concept, Underlying Basis, and Purpose Taxation has been made the implement of the state’s
police power.
Taxation - mode by which governments make exactions for revenue
in order to support their existence and carry out their 2.) Taxation is inherently legislative
legitimate objectives.
- may refer to either or both the power to tax or the act It is also legislative in character and a legislative
or process by which the taxing power is exercised prerogative. (NAPOCOR vs Albay)
These powers are not inherent in, but merely delegated by
Governmental necessity – theory or underlying basis of taxation constitutional mandate or by law to, local governments.
Commissioner vs. Pineda (21 SCRA 105) Legislative taxing power includes authority:
“Taxes are the lifeblood of the Government and their prompt and To determine the:
certain availability are an imperious need.” Nature (kind)
Object (purpose
Vera vs Fernandez (89 SCRA 199)
Extent (amount or rate)
“Upon taxation depends the Government’s ability to serve the
people whose benefit taxes are collected.” Coverage (subjects and objects)
Situs (place) of tax imposition
Commissioner vs. Algue, Inc. (158 SCRA 9) To grant tax exemptions or condonations
“Taxation is the indispensable and inevitable price for civilized To specify or provide for the administrative, as well as
society; without taxes, the government would be paralyzed.” judicial remedies that either the government or the
taxpayers may avail themselves of in the proper
Mun. of Makati vs CA (190 SCRA 206) implementation of the tax measure.
“Revenues derived from taxes are intended primarily to finance the
government and its activities and are thus exempt from execution.” Exemptions in tax delegation:
To local governments (to be exercised by the local
B. Principles of a Sound Tax System legislative bodies thereof) or political subdivisions
When allowed by the Constitution; or
1. Fiscal Adequacy When the delegation relates merely to administrative
implementation that may call for some degree of
The sources (proceeds) of tax revenue should coincide with discretionary powers under a set of sufficient
and approximate the needs of government expenditures. standards expressed by law
The non-observance of these canons will not render the The power of taxation may be delegated to local governments
tax impositions by the taxing authority invalid. in respect of matters of local concern.
o XPN: when the specific constitutional limitations
are impaired In delegating authority, the State is not limited to the exact
measure of the power which is exercised by itself. When it is
C. Scope and Limitation of Taxation said that the taxing power may be delegated to municipalities
and the like, it is meant that there may be delegated such
“reaches to every trade or occupation, to every object of industry, measure of power to impose and collect taxes as the
use or enjoyment, to every species of possession; and it imposes a legislature may deem expedient. Thus, municipalities may be
den which, in case of failure to discharge, may be followed seizure permitted to tax subjects, which for reasons of public policy the
or confiscation of property. No attribute of sovereignty is more State has not deemed wise to tax for general proposes (Pepsi
pervading and at no point does the power of the government affect Cola vs. Mun. of Tanauan 69 SCRA 460).
more constantly and intimately all the relations of life than through
the exactions made under it.” The assessment and collection of taxes duly levied are
- As Cooley has described the wide spectrum of the power executive or administrative functions, and these aspects of
to tax taxation are not covered by the non-delegation rule.
18) Tax exemption of all revenues and assets of 2) Indirect – imposed on the taxpayer who shifts the burden of the
(a) proprietary or cooperative educational institutions tax to another
(b) subject to limitations provided by law - levied upon transactions or activities before the articles subject
(Art XIV, Sec 4(3)) matter thereof reach the consumers to whom the burden of the tax
may ultimately be charged or shifted
19) Tax exemption of grants, endowments, donations or Ex. VAT, specific tax, percentage tax, customs duties
contributions USED ACTUALLY, DIRECTLY and EXCLUSIVELY for
educational purposes C. As to determination of amount
1) Specific – tax imposed and based on a physical unit of
B. Indirect measurement, as by head, number, weight, length or volume
Ex. Tax on distilled spirits, fermented liquors, cigars
Freedom of religion
• Activities simply and purely for propagation of faith are 2) Ad Valorem - tax of a fixed proportion of the value of property
exempt (e.g. sale of bibles and religious articles by non- with respect to which the tax is assessed; requires intervention of
stock, non-profit organization at minimal profit). assessor.
• Tax is unconstitutional if it operates as a prior restraint on Ex. Real estate tax, excise tax on cars, nonessential
exercise of religion Goods
• Income even of religious organizations from any activity
conducted for profit or from any of their property, real or D. As to purpose
personal, regardless of disposition of such income, is 1) General, fiscal or revenue - imposed for the general purpose of
taxable supporting the government
Ex. Income tax, percentage tax
Freedom of press/expression
• Tax that operates as a prior restraint invalid. 2) Special or regulatory - imposed for a special purpose, to
• If fee is only for purpose of defraying cost of registration achieve some social or economic objectives
and not for exercise of privilege, no violation. Ex. Protective tariffs or customs duties on imported goods intended
Mandatory Character of Constitutional Provision to protect local industries
The established rule is that constitutional provisions are to be
considered as mandatory unless by express provision or by E. As to authority imposing the tax
necessary implication. 1) National - imposed by the national government
A directory provision is generally intended merely for Ex. National internal revenue taxes, custom duties
expediency or convenience such that to have it enforced
strictly may cause more harm than by disregarding it. 2) Municipal or local - imposed by the municipal corporations or
In case of statutory enactments, those dealing on the aspects local governments
of levy and compliance are generally treated as mandatory Ex. Real estate tax, occupation tax
and those that are intended merely for administrative
feasibility as directory. F. As to graduation of rate (Three systems of taxation)
Payment – act of compliance by the taxpayer including • SITUS OF TAXATION - the place of taxation, the country that has
such options, schemes or remedies as may be legally the power to levy and collect the tax.
open or available to him.
Distinction from Certain Kinds of Exactions
Classification of Taxes
A. As to subject matter of object TAX DISTINGUISHED FROM POLICE POWER
2) Government not estopped from questioning the tax liability even POWER TO TAX INVOLVES THE POWER TO DESTROY
if amnesty tax payments were already received The doctrine seeks to describe the consequential nature of
Reason: Erroneous application and enforcement of the law by taxation and its resulting implications to wit:
public officers do not block subsequent correct application of the (a) The power to tax must be exercised with caution to
statute. The government is never estopped by mistakes or errors of minimize injury to the proprietary rights of a taxpayer
its agents. (b) If the tax is lawful and not violative of any of the inherent
Basis: Lifeblood Theory and constitutional limitations, the fact alone that it may
destroy an activity or object of taxation will not entirely
3) Defense of Tax amnesty, like insanity, is a personal defense. permit the courts to afford any relief
Reason: Relates to the circumstances of a particular accused and (c) A subject or object that may not be destroyed by the
not the character of the acts charged in the information taxing authority may not not likewise be taxed
Thus, a tax may not be imposed on the exercise of a fundamental
right since to otherwise permit it would amount to destroying that
CERTAIN DOCTRINES IN TAXATION fundamental right.