Notes on Taxation

Taxation is the power by which the sovereign raises revenue to defray the expenses of the government.

The power of taxation is inherent in the state, being an attribute of sovereignty.

NATURE  AND POWER OF TAXATION
1. It is an attribute of sovereignty - belonging as a matter of right to every independent government, without being expressly conferred by the people.
2. It is legislative in character.
3. It is generally not delegated to executive or judicial department
    EXCEPT: - to local governments in respect of matters of local concern
                    - when allowed by the constitution
                    - when the delegation relates merely to administrative implementation
                       under set of sufficient standards expressed by law
4. It is subject to constitutional and inherent limitations.

Three stages of taxation: (a)levy, (b)assessment and collection, (c)payment

BASIS of TAXATION
1 Lifeblood doctrine - the existence of government is a necessity; it cannot exist nor endure without the means to pay its expenses; without taxation, a government can neither exist nor endure.
2. Benefits-protection theory - taxes are what we pay for a civilized society.

Taxes - enforced proportional contributions from persons and property levied by the lawmaking body of the state by virtue of its sovereignty for the support of government and for all public needs. (1 Cooley 62)

ATTRIBUTES OF TAXES
1. It is a forced charge, imposition or contribution.
2. In accordance with reasonable rule of apportionment; taxes must be based on taxpayer's ability to pay.
3. It is a pecuniary burden payable in money.
4. It is imposed by the state in accordance with the principle of territoriality.
5. It is levied by the legislative body of the state.
6. It is levied for a public purpose.
7. It is personal to the taxpayer.

PURPOSES AND OBJECTIVES OF TAXATION
1. Revenue
2. Regulatory
3. Promotion of general welfare
4. Reduction of social inequality
5. Encourage economic growth by granting incentives and exempritons
6. Protectionism

INHERENT LIMITATIONS
1. The levy must be for a public purpose.
2. Non-delegation of the legislative power to tax.
3. Exemption from taxation of government entities.
4. International comity.
5. Territorial jurisdiction.

CONSTITUTIONAL LIMITATIONS
1. No person shall be deprived of life, liberty or property without due process of law (Sec1, Art.III, 1987 Constitution)
2. Nor shall any person be denied the equal protection of the laws (Sec. 1, Art.III, 1987 Constitution)
3. The rule of taxation shall be uniform and equitable. The congress shall evolve a progressive system of taxation (Sec 28[1], Art III, 1987 Constitution)
4. No law impairing the obligation of contracts shall be passed (Sec 10, Art III, 1987 Constitution)
5. The free exercise and enjoyment of religious profession and worship, without discrimination or preference, shall forever be allowed (Sec 5, Art III, 1987 Constitution)
6. Freedom of the press
7. Tax exemption of properties for religious, charitable and educational purposes
8. All appropriation, revenue or tariff bills shall originate from the House of Representatives, but the Senate may propose or concur with amendments (Sec 24, Art VI, 1987 Constitution)
9. No law granting any tax exemption shall be passed without the concurrence of a majority of all the members of the Congress (Sec 28[4], Art VI, 1987 Constitution)
10. Every bill passed by Congress shall embrace only one subject, which shall be expressed in the title thereof.

Source: Reviewer on Taxation by Atty. Victorino C. Mamalateo