Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
TAX LAW AND JURISPRUDENCE It is inherent in the power to tax that a state be free to
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 Taxation has been made the implement of the states
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 It is also legislative in character and a legislative
act 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 Governments ability to serve the
Coverage (subjects and objects)
people whose benefit taxes are collected.
Situs (place) of tax imposition
To grant tax exemptions or condonations
Commissioner vs. Algue, Inc. (158 SCRA 9)
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
12) No use of public money or property for religious purposes Assessment and Collection act of administration and
except if priest is assigned to armed forces, penal institutions, implementation of the tax law by the executive through its
government orphanage or leprosarium administrative agencies.
- means notice and demand for payment of a tax
13) Special purpose - special fund for said purpose, balance goes liability
to general funds
Payment act of compliance by the taxpayer including
14) Veto power of the President - revenue/tariff bill such options, schemes or remedies as may be legally
(Art. VI Sec 27, second par) open or available to him.
15) Power of review, revise, reverse, modify or affirm on appeal or Classification of Taxes
certiorari of the SC Rules of Court A. As to subject matter of object
(Art VIII, Sec 5, par 2)
1) personal, poll, capitation tax
16) Power of Local Government to create their own sources and (a) fixed amount
levy taxes, fees, charges (b) individuals residing within specified territory
(Art X, Sec 6) (c) without regard to their property, occupation or business
Ex. Community Tax (Cedula)
17) Just share of local government in national revenue which shall
be automatically released. 2) property tax
(a) imposed on property, real or personal
18) Tax exemption of all revenues and assets of (b) in proportion to its value or other reasonable method of
(a) proprietary or cooperative educational institutions apportionment
(b) subject to limitations provided by law Ex. Real estate tax
(Art XIV, Sec 4(3))
3) excise, privilege tax
19) Tax exemption of grants, endowments, donations or
contributions USED ACTUALLY, DIRECTLY and EXCLUSIVELY for (a) imposed upon performance of an act, the enjoyment of a
educational purposes privilege or the engaging in an occupation, profession or
business
B. Indirect Ex. Income tax, VAT, estate tax, donors tax
Freedom of religion B. As to who bears the burden
Activities simply and purely for propagation of faith are 1) Direct the tax is imposed on the person who also bears the
exempt (e.g. sale of bibles and religious articles by non- burden thereof
stock, non-profit organization at minimal profit). Ex. Income tax, community tax, estate tax, donors tax
4
2) Indirect imposed on the taxpayer who shifts the burden of the party to contract
tax to another granting exemption;
- levied upon transactions or activities before the articles subject or (b) involves
matter thereof reach the consumers to whom the burden of the tax franchise
may ultimately be charged or shifted Transfer of Taxes paid Allows merely the
Ex. VAT, specific tax, percentage tax, customs duties Property form part of the restraint on the
rights public funds exercise of property
C. As to determination of amount rights
1) Specific tax imposed and based on a physical unit of
measurement, as by head, number, weight, length or volume TAX DISTINGUISHED FROM EMINENT DOMAIN
Ex. Tax on distilled spirits, fermented liquors, cigars
TAX EMINENT DOMAIN
2) Ad Valorem - tax of a fixed proportion of the value of property Purpose Raise revenue The taking of
with respect to which the tax is assessed; requires intervention of property for public
assessor. use
Ex. Real estate tax, excise tax on cars, nonessential Compensation Payment of taxes Just compensation is given
Goods accrue the owner
to the general of the expropriated
D. As to purpose benefit of the property
1) General, fiscal or revenue - imposed for the general purpose of citizens of the
supporting the government taxing State
Ex. Income tax, percentage tax Persons Applies to all Only particular
affected persons, property property is
2) Special or regulatory - imposed for a special purpose, to and comprehended
achieve some social or economic objectives excises that
Ex. Protective tariffs or customs duties on imported goods intended may be
to protect local industries subject
thereto
E. As to authority imposing the tax
1) National - imposed by the national government
Ex. National internal revenue taxes, custom duties TAX DISTINGUISHED FROM LICENSE FEE
2) Municipal or local - imposed by the municipal corporations or TAX LICENSE FEE
local governments
Source Exercise of Emanate from the police
Ex. Real estate tax, occupation tax
Taxing power power of the State
Purpose Raise revenue Regulation
F. As to graduation of rate (Three systems of taxation)
Object Persons, Right to exercise a
1) Proportional - based on a fixed percentage of the amount of the property and privilege
property, income or other basis to be taxed privilege
Ex. Real estate tax, VAT, percentage tax Amount no limit only necessary to carry out
regulation
2) Progressive or graduated - tax rate increases as the tax base
or bracket increases Distinction lies in the primary purpose:
Ex. Income tax, estate tax, donors tax License fee if primary purpose is to regulate and the excess of
the amount collected from the cost to carry out the regulation is
3) Regressive - tax rate decreases as the tax base increases minimal and incidental.
Tax if primary purpose, or at least one of the real and substantial
4) Degressive - increase of rate is not proportionate to the purposes is to raise revenue.
increase of tax base If amount is too high for regulation, it would be a tax; unless
imposed on non-useful occupations or businesses.
5) Mixed - partly progressive and partly regressive Purpose of distinction: limitations and exemptions apply only to
one and not to the other (ex. Exemption from taxation does not
SITUS OF TAXATION - the place of taxation, the country that has include exemption from fee)
the power to levy and collect the tax.
TAX DISTINGUISHED FROM DEBT
Distinction from Certain Kinds of Exactions
TAX DEBT
TAX DISTINGUISHED FROM POLICE POWER Source Law; legal Based on contract
obligation
TAX POLICE POWER Personal Assignable
(in the form of a FEE) Generally not May be the subject
Purpose Raise revenue Exercise to promote public subject to of compensation/setoff
welfare through regulation compensation/setoff
Amount of No limit Limited to the cost of Imprisonment is No imprisonment
exaction regulation, issuance of sanction for for non-payment
license, or surveillance nonpayment
Superiority Contracts may Contracts may be
of contracts be impaired unless impaired GENERAL RULE: Taxes cannot be the subject of compensation or
(a) government is set-off
5
INTERPRETATION AND CONSTRUCTION
* A person cannot refuse to pay a tax on the ground that the OF TAX STATUTES
government owes him an amount equal to or greater than the tax Where the doubt exists in determining the legislative intent, the
being collected. The collection of tax cannot await the results of a doubt must be resolved liberally in favor of taxpayers and
lawsuit against the government. strictly against the taxing authority.
The government is never estopped from collecting taxes
Reasons: because of mistakes or errors on the part of its agents.
lifeblood theory The tax burdens are not to be imposed nor presumed to be
taxes are not contractual obligation (absence of consent of imposed beyond what the statute expressly and clearly
taxpayer) imports, tax statutes being construed strictissimi juris against
taxpayer and government are not mutual debtors and the government.
creditors of each other The exemptions (or equivalent provisions such as tax
amnesties and tax condonations) are not presumed and when
granted, are strictly construed against the grantee.