Beruflich Dokumente
Kultur Dokumente
1. Define Taxation:
A means by which governments finance their expenditure by
imposing charges on citizens and corporate entities.
2. Describe the nature/theory, basis, objectives/purpose, scope of
taxation.
-Nature:
1. It is inherent in sovereignty.
2. Legislative in character.
3. Subject to constitutional and inherent limitations.
Basis:
The power of taxation proceeds upon the theory that the existence of the
government is a necessity, that it cannot continue without means to pay its
expenses and that for this means it has a right to compel all its citizens and
property within its limits to contribute.
The basis is the reciprocal duties of protection and support between the
State and its inhabitants. The State collects taxes from the subjects of
taxation in order that it may be able to perform the functions of government.
The citizens, on the other hand, pay taxes in order that they may be
secured in the enjoyment of the benefits of organized society (benefits
received theory).
Lifeblood theory:
1. Taxes are the lifeblood of the Government and their prompt and
certain availability are imperious (expecting obedience) need.
2. Upon taxation depends the government’s ability to serve the people
for whose benefit taxes are collected.
Manifestation of lifeblood theory:
1. Imposition of tax even in the absence of Constitutional grant.
2. Right to select objects of taxation.
3. No injunction to enjoin (or stop) tax collection.
Purposes of taxation:
1. The principal (primary) purpose is to raise revenue for governmental
needs. This is also called revenue or fiscal purpose.
2. The secondary purposes of taxation are:
Compensatory purposes
1. To reduce excessive inequalities of wealth.
2. To maintain high level of employment.
3. To control inflation.
Sumptuary or regulatory purpose
1. To implement the police power of the State to promote the general
welfare.
6. What are the nature and characteristics of the states’ power to tax?
-It is inherent in sovereignty, hence, it may be exercised although not
expressly granted by the Constitution.
-It is legislative in character, hence, only the legislature can impose taxes
(high prerogative of sovereignty).
-It is subject to constitutional and inherent limitations, hence, it is not an
absolute power that can be exercised by the legislature anyway it pleases
8. ASPECTS OF TAXATION
The three stages or aspects of taxation are:
1. Levy
– This refers to the enactment of a law by
Congress imposing a tax
2.Assessment and collection
– This is the act of
administration and implementation of the tax law by the executive
department through the
administrative agencies
3.Payment
– This is the act of compliance by the
taxpayer including whatever remedies are available to him under the law
Commissioner vs. Pineda, 21 SCRA 105- Taxes are the lifeblood of the
government and their prompt and certain availability are an imperious
need.
CIR vs. Algue, 158 SCRA 8- The government will not be able to survive and
continue to perform its functions without taxes.
Along with police power ( for public good and welfare ) and eminent domain
( for public use ), taxation ( for revenue ) is an inherent power of the
sovereignty.
Cases:
National Power Corporation vs. Albay, 186 SCRA 198- Power of taxation is
legislative in character and is a legislative prerogative.
Petro vs. Petilla, 198 SCRA 82- The legislative taxing power includes the
authority: a. to determine the nature, object, extent, coverage, and situs of
the tax imposition, b. to grant tax exemptions or condonations, and c. to
specify or provide for the administrative, as well as judicial remedies that
either the government or the taxpayers may avail themselves of in the
proper implementation of the tax measure.
Roxas vs. CTA, 23 SCRA 276- The power of taxation includes the power to
destroy if it is used validly as an implement of the police power of the state.
If it is used solely for the purpose of raising revenue, it does not include the
power to destroy.
Standard Oil Co. vs. Posadas, 55 Phil 715- While ordinarily the government
does not tax its own political subdivisions or its other entities, it may,
however, do so by providing for it explicitly.
The proceeds of the tax must be used a. for the support of the State or b.
for some recognized objects of government or directly to promote the
welfare of the community.
Cases:
Pascual vs. Sec. of Public Works, 110 Phil 331- The legislature is without
power to appropriate public revenues for anything but a public purpose.
Valentin Tio vs. Videogram Regulatory Board, 151 SCRA 208- The public
purpose of a tax may legally exist even if the motive which impelled the
legislature to impose the tax was to favor one industry over another.
V. TAXPAYER SUIT
It is the remedy available to a taxpayer when taxes are used for illegal
activities or when the public funs are used by the government for projects
which are not intended for a public purpose.
Cases:
Pascual vs. Sec. of Public Works, 110 Phil 331- It is only when an act
complained of, which may include a legislative enactment, directly involves
illegal disbursement of public funds derived from taxation.
Maceda vs. Macaraig, 197 SCRA 771- When the issue involve the legality
of expenditure of tax money, a taxpayer suit could be filed.
Essential characters:
(1) It is an enforced contribution. – A tax is not a voluntary payment or
donation (84 C.J.S. 32.) and its imposition is in no way dependent upon the
will or assent, open or implied, of the person taxed. (71 Am. Jur. 2d 344.)
To be sure, taxation without representation, or without the consent in some
form of those who are to be taxed, is contrary to the fundamental principles
of good government. The principle of representation, however, applies only
to political communities, as such, and not to individuals. It is satisfied by
their adequate representation in the legislative body which votes the tax.
(83 C.J.S. 48.)
(5) It is levied by the state which has jurisdiction over the person or
property. – The object to be taxed must be subject to the jurisdiction of the
taxing state. (infra.) This is necessary in order that the tax can be enforced.
Although a state can tax all persons subject to its jurisdiction for all their
property left by them within its jurisdiction to seize upon person or property
for purposes of taxation.
(6) It is levied by the law-making body of the state. – The power to tax is a
legislative power which under the Constitution only Congress can exercise
through the enactment of tax statutes. Accordingly, the obligation of a tax is
statutory liability.
(b) During the period of martial law, (Sept. 21, 1972 to Jan. 17, 1981), the
then incumbent President exercised the executive powers vested under the
1973 Constitution in the Prime Minister (who was the Chief Executive
before its amendment in 1981) as well legislative powers through the
issuance of “presidential decrees”.
(7) It is levied for public purpose or purposes. – Taxation involves, and a tax
constitutes, s charge or burden imposed to government, the administration
of the law, or the payment of public expenses. Revenues derived from
taxes cannot be used for purely private purposes or for the exclusive
benefit of private persons. (Gaston vs. Republic Planters Bank, 158 SCRA
626, Mar. 15 1988.) The “public purpose or purposes” of the imposition is
implied in the levy of tax.
-The Property tax is the tax that is imposed on ones property; whether with
is a real property or personal property in proportion with the property’s
value.
-The Excise Tax is a tax that is imposed upon the performance of an act as
well as the enjoyment of a privilege or the engaging in a particular
occupation.
According to who bears the burden, taxes are either direct or indirect.
-The direct tax is the tax that is directly demanded from and paid by the
taxpayers.
-The Indirect tax is the tax that is demanded from a certain person in the
intention as well as expectation that the particular person shall indemnify
himself at the expense of another.
According to the determination of the amount, taxes are further classified to
specific and Ad valorem.
-The Specific Tax is the tax that is of fixed amount that is imposed by the
head or number, or by some of the standard of the weight and
measurement
-The Ad valorem Tax is the Tax that is of fixed proportion in relation with the
value of the property in respect to which the tax is assed.
According to the purpose, taxes are further classified as General, Fiscal or
revenue and Special of regulatory.
-The General, Fiscal or revenue tax is the tax that is intended for the
general purposes or expenses of the government.
-The Special or regulatory tax is the tax that is intended for a specific
purpose.
In the National scope, the taxes are imposed by the National Government
itself while in the municipal or local, the taxes are imposed by the local
government.
-The Proportional tax is the tax that is based upon the fixed percentage vis-
à-vis the amount of the property or other bases on which to be taxed.
-The Progressive or Graduated tax is the tax rate increase upon the
increase of the base rate.
-The Regressive tax is the tax rate decrease upon the increase of the base
rate.