8/13/19&

GENERAL PRINCIPLES
REPORTERS: Enimedo & Marcia

!  Taxation is the inherent power of the

sovereign exercised through the legislature to
impose burdens upon subjects and objects
within its jurisdiction for the purpose of
raising revenues to carry out the legitimate
objects of government. It is the mode of
raising revenue for public purposes.

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!  INHERENT POWER

!  LEGISLATIVE IN CHARACTER

The state MAY

exist without
taxation but
may not be able
! The power of taxation is inherent in the State, to provide for the
being an attribute of sovereignty. The power needs of the
to tax is an incident of sovereignty and is state.
unlimited in its range, acknowledging in its
very nature no limits, so that security against Taxation is
abuse is to be found only in the responsibility revenue
of the legislature which imposes the tax on generating for the
the constituency who are to pay it. (MACTAN state. (ex. Alaska,
CEBU INTERNATIONAL AIRPORT AUTHORITY not tax—but
provides for
VS. MARCOS [261 SCRA 667]). needs of state
This is so because the very existence of the through other
State is dependent on taxes income
generating
means.

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Is taxation the
strongest power
of the state?
!  The power of taxation is essentially a legislative According to
function. Taxation is an attribute of sovereignty. justice: It is the
It is the strongest of all powers of the strongest because
it it inherently
government. There is a presumption in favor of
unlimited and can
legislative determination. Public policy decrees embarass or
that since upon the prompt collection of revenue destroy.
depends the very existence of government itself,
You may pay
whatever determination shall be arrived at by the
UNDER
legislature should not be interfered with, unless PROTEST, but
there be a clear violation of some constitutional may still pay the
inhibition. [SARASOLA VS. TRINIDAD [40 PHIL. taxes imposed.
252] (Sarasola case)

Regulation
TAXATION POLICE POWER EMINENT
DOMAIN

AUTHORITY Only by the Only by the May be exercised

government or its government or its by (1) government
p o l i t i c a l p o l i t i c a l or political
subdivisions subdivisions subdivisions OR (2)
granted to public
utilities

PURPOSE The property is The use of the The property is

taken for the p r o p e r t y i s taken for public
support of the regulated for use and must be
government promoting the compensated
general welfare
a n d i s n o t
compensable

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PERSON O p e r a t e s o n a O p e r a t e s o n a Operates on an
AFFECTED community or community or individual as
class of individuals class of individuals o w n e r o f a
particular property

EFFECT The money There is no There is a transfer

contributed transfer of title. At of the right to
becomes part of most, there is property
the public funds restraint on the
injurious use of
property

BENEFITS It is assumed that The person He receives the

RECEIVED the individual affected receives market value of
receives the indirect benefits the property taken
equivalent of the as may arise from from him
tax in the form of the maintenance
protection and of a healthy
benefits he economic standard
receives from the of society
government

1.  Public purpose – the revenues collected

from taxation should be devoted to a public
purpose.
2.  Inherently legislative or non-delegability of
the taxing power -Only the legislature can
exercise the power of taxes unless the same
is delegated by the constitution or through
a law which does not violate the
constitution.

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!  The power to tax is an incident of sovereignty

and is unlimited in its range, acknowledging
in its very nature no limits, so that security
against abuse is to be found only in the
responsibility of the legislature which
imposes the tax on the constituency who are
to pay it.

Inherent: even if
there is no law, the
government may
!  Yes. The power to tax is no longer vested exclusively exercise the power
on Congress. The local governments are now given to tax
direct authority to levy taxes, fees and other charges
pursuant to Section 5, Article X, of the 1987
Constitution. NAPOCOR V. CITY OF CABANATUAN Local Government:
[G.R. NO. 149110, APRIL 9, 2003]. delegated power of
taxation, national
!  It must be noted, further, that the power is not government may
inherent in the local government unlike in the not deprive the
national government. MANILA ELECTRIC COMPANY local govt of power
VS. PROVINCE OF LAGUNA [306 SCRA 750].
to tax because
their power
!  A municipal corporation has no inherent right to
impose taxes. Its power to tax must always yield to a emanates from the
legislative act which is superior having been passed constitution.
by the state itself which has the inherent power to
tax. (BASCO VS. PAGCOR [197 SCRA 52])

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Territoriality or situs of taxation – the taxing

power should be exercised only within the
territorial jurisdiction of the taxing authority.

!  However broad the power of taxation may be

as to its character and no matter how
searching it is in its extent, such power is
necessarily limited only to persons, property
or businesses within its jurisdiction.
Territoriality:
usually the
Philippines vis a
vis other countries

1. Where tax laws operate outside territorial

jurisdiction (i.e. taxation of resident citizens on
their incomes derived from abroad)

2. Where tax laws do not operate within the

territorial jurisdiction of the state (i.e. when
exempted by treaty obligations and when
exempted by international comity.)

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!  The situs of taxation is the place or authority

that has the right to impose and collect taxes.

1.  Non-imprisonment for non-payment of

poll-tax (Article III, Sec. 20)

2.  Uniformity, equitability and progressivity of

taxation (Article VI, Section 28, par. 1).

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!  Uniformity requires that all subjects or

objects of taxation similarly situated are to be
treated alike or put on equal footing both in
privileges and liabilities (SISON V. ANCHETA
[130 SCRA 654] .

!  Equitable means fair, just, reasonable and

proportionate to one’s ability to pay.

Can Congress
Progressiveness - The Constitution to do is pass a tax law that
only to "evolve a progressive system of is inequitable?
taxation." This is a directive to Congress, just
like the directive to it to give priority to the ANS: Yes.
enactment of laws for the enhancement of
human dignity and the reduction of social,
economic and political inequalities or for the
promotion of the right to "quality education."
These provisions are put in the Constitution as
moral incentives to legislation, not as judicially
enforceable rights. Thus, even if the VAT is
regressive because it is an indirect tax, it is not
prohibited by the Constitution. (TOLENTINO VS.
SECRETARY OF FINANCE [249 SCRA 628])

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3. Grant by Congress of authority to the President to fix

tariff rates, import and export quotas, etc (Article VI,
Section 28, par. 2)
Exempt for real
4. Tax exemption of properties actually, directly, and property tax:
exclusively used for religious, charitable and religious,
educational purposes (Article VI, Section 28, par. 3) charitable,
5. Exemption from taxes of the revenues and assets of educational.
educational institutions including grants, endowments,
donations or contributions. (Article XVI, Section 4, par. Educational
3) institutions
exemption for tax
6. President’s veto power on appropriation, revenue, is much wider.
tariff bills (Article VI, Section 27, par. 2)

7. Non-impairment of the Supreme Court’s jurisdiction

in tax cases (Article VIII, Sec. 5, par. 2(b))

8. Power of local governments to create its own

sources of revenue and to levy taxes subject to
Congressional limitations (Article X, Section 6)

9. Voting requirement in connection with the

legislative grant of tax exemption (Article VI,
Section 28, par. 4)

10. The provision which mandates that money

collected on a tax levied for a public purpose
shall be paid out for such purpose only (Article
VI, Section 29, par. 3)

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Under Article VI, Section 28, the following are

exempt from real property taxes:
1. Charitable institutions
2. Churches
3. Parsonages or convents appurtenant thereto
4. Mosques
5. Non-profit cemeteries; and
6. All lands, buildings, and improvements,
actually, directly and exclusively used for
religious, charitable or educational purposes.
The exemption provided for under Article VI, Section
28 pertains only to real property taxes (LLADOC V.
CIR [14 SCRA 292]).

Memorize all requisites!

1.  For public purpose;
2.  Taxation should be uniform;
3.  The person or property taxed is within the
jurisdiction of taxing authority;
4.  Assessment and collection is in consonance
with the due process clause; and
5.  The tax must not infringe on the inherent
and constitutional limitations of the power
of taxation.

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1. Tax vs. Tariff

2. Tax vs. Toll
3. Tax vs. License fee
4. Tax vs. Special assessment
5. Tax vs. Debt

!  A tax is an all embracing term to include

various kinds of enforced contributions
imposed upon persons for the attainment of
public purposes, while a tariff should be
understood to mean a kind of tax imposed on
articles which are traded internationally.

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Toll operator may

!  Tax is an enforced proportional contributions collect the
from persons and property, while Toll is a amount used for
sum of money for the use of something, a the construction
consideration which is paid for the use of a of the roads so
property which is of a public nature. they may validly
charge toll fee.
!  Tax is a demand of sovereignty, while Toll is
a demand of proprietorship. Toll is collected
!  Tax has no limit as to the amount, while the by the
amount of toll depends upon the cost of contractors in
construction or maintenance of the public their private
capacity.
improvement used;
!  Tax may only exercise by the Government,
while Toll may be enforced by private entities.

!  Tax is imposed for revenue purposes, while License TRAVEL TAX:

fee is imposed for regulatory purposes Can imposition of
!  Tax is imposed under the power of taxation, while travel tax be
License is imposed under the police power of the challenged before
State the courts?
!  There is no limit as to the amount of tax, while the
amount of license fee that can be collected is limited
to the cost of the license and the expenses of police
surveillance and regulation
!  Tax is normally paid after the start of business
License is normally paid before the commencement
of the business
!  Failure to pay the tax does not make the business
illegal, while failure to pay the license fee makes the
business illegal.

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Assessed by local government

If your property
benefits from
improvements of
!  Tax is an enforced proportional contribution from the government
persons and property , SA is an enforced proportional
contribution from owners of lands especially or
peculiarly benefited by public improvements;
!  Tax is based on necessity, while SA is based wholly
on benefits;
!  Tax is levied on: (1) persons, (2) Property and (3)
Acts, while SA is levied only on land;
!  Tax has general application while SA is exceptional
application both as to time and place;
!  Tax is a personal liability of the taxpayer, while SA is
not a personal liability of the person assessed; his
liability is limited only to the land involved.

!  Tax is based on law, while debt is based on

contract or judgment;
Unless—there is
!  Taxpayer may be imprisoned for his failure to fraud/estafa.
pay the tax, while no imprisonment for failure to Subject to
pay a debt; provisions of
!  Tax is generally payable in money while debt may criminal law.
be payable in money, property and services;
!  Tax is not assignable; debt can be assigned
!  Tax does not draw interest unless delinquent
while debt draws interest if stipulated or delayed;
!  Tax is imposed by public authority, while debt
can be imposed by private

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1. As to object
a) Personal, capitation, or poll tax
b) Property tax
c) Privilege tax
2. As to burden or incidence
a) Direct
b) Indirect
3. As to tax rates
a) Specific
b) Ad valorem
c) Mixed

4. As to purposes
a) General or fiscal
b) Special, regulatory, or sumptuary
5. As to scope or authority to impose
a) National – internal revenue taxes
b) Local – real property tax, municipal tax
6. As to graduation
a) Progressive
b) Regressive
c) Proportionate

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!  Personal, capitation, or poll tax - Taxes of a fixed

amount upon all persons of a certain class within the
jurisdiction of the taxing power without regard to
the amount of their property or the occupations of
businesses in which they may be engaged (e.g.
community tax)
!  Property Tax - Taxes assessed on all property or all
property of a certain class within the jurisdiction of
the taxing power (e.g. real estate tax)
!  Excise or privilege tax - Taxes laid upon the
manufacture, sale or consumption of commodities
within the country; upon licenses to pursue certain
occupations and upon corporate privileges (e.g.
value-added tax)

!  Direct - Taxes wherein both the tax liability

as well as the impact or burden of the tax
falls on the same person (e.g. corporate and
individual income tax)
!  Indirect - Taxes wherein the tax liability falls
on one person but the burden thereof may be
shifted or passed to another. (e.g. value-
added tax, percentage taxes)

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!  Specific - Tax which imposes a specific sum

by the head or number or by some standard Based on weight
(ex. cement)
of weight or measurement and which requires
no assessment beyond a listing and
classification of the subjects to be taxed (e.g.
taxes on distilled spirits)
!  Ad Valorem - Tax upon the value of the Based on the
article or thing subject of taxation (e.g. real selling price
(ex. VAT)
estate tax)
!  Mixed - A choice between ad valorem or
specific depending on the condition attached

!  General or fiscal or revenue - Taxes levied

for the general or ordinary purposes of
Government (e.g. income tax, value-added
tax)
!  Special, regulatory, or sumptuary - Taxes
levied for a special purpose (e.g. protective
tariffs, custom duties)

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!  National (internal revenue taxes) - Taxes

levied by the National Government (e.g.
national internal revenue taxes)
!  Local (real property tax, municipal tax) -
Taxes levied by the local governments subject
to such guidelines and limitations as the
Congress may provide (e.g. real estate tax)
Local government cannot tax anything that has
already been taxed by the national government.
It cannot tax any rate higher than that included in
the Local Government Code.

!  Progressive - Taxes imposed where the tax

rate increases as the tax base increases (e.g.
income tax)
!  Regressive - Taxes imposed where the tax
rate decreases as the tax base increases.
!  Mixed - The tax rates are partly progressive
and partly regressive
!  Proportionate - The tax rates are fixed (in
amounts or in percentage) on a flat tax base)
(e.g. real estate tax)

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•  Construction and Interpretation of Tax Laws, Rules

and Regulations
•  Prospectivity of Tax Laws
•  Imprescriptibility of Taxes
•  Double Taxation
•  Escape from Taxation
•  Exemption from Taxation
•  Equitable Recoupment
•  Prohibition on Compensation and Set-Off
•  Compromise and Tax Amnesty

Construction and Interpretation of Tax

Laws, Rules and Regulations

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Rule on Construction or Interpretation of Tax

Laws

General Rule:
There is no need for statutory construction if
the tax law is clear. Where the law is clear and
unambiguous, the law must be taken as it is
devoid of judicial addition or subtraction.

Exception:
If there is an ambiguity in the law, statutory
construction is but proper and tax laws shall be
liberally interpreted in favor of the taxpayer and
strictly against the taxing authority.

As held in the case of PHILIPPINE HEALTH CARE

PROVIDERS V. CIR [554 SCRA 411], tax statutes
are strictly construed against the taxing
authority because taxation is a destructive
power which interferes with the personal and
property rights of the people and takes from
them a portion of their property for the
support of the government.
TAX EXEMPTION: Construed strictly against the
taxpayer and in favor of the taxing authority. Must
strictly prove that all requirements of exemption is met.

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As they have the force and effect of law, tax

rules and regulations are construed strictly
against the government and liberally in favor of
the taxpayer.

Exception to progressive rule.

Yes. BIR issuances may be applied retroactively

if its application will not be prejudicial to the
taxpayer. (see Section 246, NIRC)

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As provided in SECTION 246 OF THE NIRC, rulings and

circulars, rules and regulations promulgated by the CIR
would have no retroactive application if to so apply them
would be prejudicial to the taxpayers except in the following
cases: Exception to the exception of progressive rule.

(a)  Where the taxpayer deliberately misstates or omits

material facts from his return or any document required
of him by the Bureau of Internal Revenue;

(c)  Where the facts subsequently gathered by the Bureau of

Internal Revenue are materially different from the facts
on which the ruling is based; or

(e)  Where the taxpayer acted in bad faith.

The Supreme Court opined that the non-

retroactivity of rulings by the CIR is
inapplicable where the nullity of the issuance
was declared by the Courts and not by the CIR.

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PROSPECTIVITY
OF
TAX LAWS

General Rule:
Taxes must only be imposed
prospectively.

Exception:
May be imposed retroactively
(1) if the law expressly provides; and
(2) if it will not amount to a denial of due
process.

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Inheritance taxation is governed by the

statute in force at the time of the death of the
decedent, unless the language of the statute
clearly demands or expresses that it shall have
a retroactive effect which is not the case. And
such Revenue laws are not to be classed penal
laws, so even if favorable, should not be given
retroactive effect.
Tax should be prospective because
of the due process requirement of
taxation. Tax is an imposition and
there must be due process.

IMPRESCRIPTIBILITY
OF
TAXES

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General Rule:
Taxes are imprescriptible.

Exception:
The tax law may provide otherwise. In
particular, the NIRC and LGC provides for
prescriptive periods for assessment and
collection of taxes

Prescription is
beneficial for both
The law prescribing a limitation of actions the government
for the collection of the income tax is beneficial and its citizens.
both to the Government and to its citizens; to
the Government because tax officers would be
obliged to act promptly in the making of
assessment, and to citizens because after the
lapse of the period of prescription citizens would
have a feeling of security against unscrupulous
tax agents who will always find an excuse to
inspect the books of taxpayers, not to determine
the latter's real liability, but to take advantage of
every opportunity to molest peaceful, law-
abiding citizens.

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DOUBLE TAXATION

Is defined as taxing the same property

twice when it should be taxed but once. It has
also been defined as taxing the same person
twice by the same jurisdiction over the same
thing. It is sometimes known as “duplicate
taxation.”

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There is direct double taxation if the two taxes

are imposed:

1.  On the same subject matter IMPORTANT!

2.  For the same purpose
3.  By the same taxing authority
4.  Within the same jurisdiction
5.  During the same taxing period
6.  The taxes must be of the same kind or
character

The Supreme Court held that both a

license fee and a tax may be imposed on the
same business and occupation and such as not
a violation of the rule against double taxation.
The impositions are of a different character.
The first is a license fee for the privilege of
engaging in the sale of liquor in the exercise of
police power while the other is imposed for
revenue purposes based on the sales made.
What is the basis of the taxation and license fee?
READ CASE.

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It has been expressly affirmed by the

Supreme Court that such an argument against
double taxation may not be invoked where one
tax is imposed by the state and the other is
imposed by the city, it being widely recognized
that there is nothing inherently obnoxious in
the requirement that license fees or taxes be
exacted with respect to the same occupation,
calling or activity by both the state and the
political subdivisions thereof

ESCAPE FROM TAXATION

a. SHIFTING OF TAX BURDEN

b. TAX AVOIDANCE
c. TAX EVASION

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Is the process by which the burden of a

tax is transferred from the statutory taxpayer
or the one whom the tax was assessed or
imposed to another without violating the law.

IMPORTANT:
Only indirect taxes
1. Forward shifting EXAMPLE: VAT may be shifted.
When the burden of the tax is transferred from a factor
of production through the factors of distribution until it finally
settles on the ultimate purchaser or consumer.

2. Backward shifting EXAMPLE:

When the burden of the tax is transferred from the
consumer or purchaser through the factors of distribution to
the factors of production.

3. Onward shifting
When the tax is shifted two or more times either forward
or backward.

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Direct taxes are taxes wherein the impact

or liability for the payment of the tax as well as
the incidence or burden of the tax falls on the
same person.
On the other hand, indirect tax are taxes
wherein the impact or the tax liability for the
payment of the tax falls on one person but the
incidence or burden thereof can be shifted or
passed to another.

TAX AVOIDANCE

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Is the tax saving device within the means

sanctioned by law. This method should be used
by the taxpayer in good faith and at arms
length
Example: Donor’s Tax
Amount allowed to give to heirs will not be taxable.

The Supreme Court opined that there was nothing

wrong or objectionable about the "estate planning"
scheme resorted to by the taxpayers. The legal right of
a taxpayer to decrease the amount of what otherwise
could be his taxes or altogether avoid them, by means
which the law permits, cannot be doubted. In the said
case, the taxpayers acquired 2,500 original unissued
no par value shares of stocks of the corporation in
exchange for their properties. By virtue of this
exchange, the taxpayers became stockholders of the
corporation by subscription. In effect, they changed the
nature of their ownership from unincorporated to
incorporated form by organizing the corporation to
take control of properties and at the same save on
inheritance taxes.
NIRC tax free
provision

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TAX EVASION

Is a scheme used outside of those lawful

means and when availed of, it usually subjects
the taxpayer to further or additional civil or
criminal liabilities.

Three factors of tax evasion.

RESEARCH

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The Supreme Court held that the three

factors in tax evasion were present. The two
transfers were tainted with fraud since the
intermediary transfer (from the corporation to
a natural person) was prompted only by the
desire to mitigate tax liabilities and not for any
business purpose.
What made the SC say that it was a tax evasion case?
- There was no actual possession of the property because
there was the execution of the sale within the same day
and the notary public was the same. It only involved a
passing of documents within the parties.

A tax exemption is defined as a grant of

immunity, express or implied, to particular
persons or corporations from the obligation to
pay taxes.

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!  Both the power to tax and to exempt certain

persons are vested in the legislature. In
particular, ARTICLE VI, SECTION 28 OF THE
CONSTITUTION provides that “No law
granting any tax exemption shall be passed
without the concurrence of a majority of all
the Members of the Congress.”

1. Where the President exercises his power under

the flexible tariff clause to remove existing
protective tariff rates (Section 28(2), Article VI,
1987 Constitution)
2. The local government may grant exemptions
from the payment of local taxes without
congressional approval consequent to its power to
levy taxes, fees and other charges. (Section 5,
Article X, 1987 Constitution)
3. Where the President enters into and ratify a tax
treaty granting certain exemptions subject only to
Senate occurrence.

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!  No. In NDC v. CIR [151 SCRA 472], at issue

was whether the undertaking signed by the
Secretary of Finance in the promissory note
can be considered an exemption on taxes on
the interest remitted. The Supreme Court
ruled in the negative and opined that tax
exemptions cannot be merely implied but
must be categorically and unmistakably
expressed.
Freeport Charter:
5% gross tax

1. Mere personal privileges to the grantees;

2. Generally revocable by the government
unless founded on contract which is protected
by the non-impairment clause;
3. Implies a waiver on the part of the
Government of its right to collect what
otherwise would be due; and
4. Not necessarily discriminatory so long as the
exemption has a rational basis.

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As to source :
!  Constitutional - Exemption originates from
the Constitution;
!  Statutory - Emanating from legislation;
!  Contractual - Based on contractual stipulation;

!  Treaty - Based on treaty provisions

!  Ordinance - Based on an ordinance exempting
payment of local government taxes.

As to manner of creation :
!  Express - Expressly granted by organic or
statute law;
!  Implied - Whenever particular persons,
properties, or excises are deemed exempt as
they fall outside the scope of the taxing
provision.

As to scope of extent :
!  Total - When certain persons, property or
transactions are exempted from all taxes;
!  Partial - When certain persons, property or
transactions are exempted from certain taxes.

St. Luke’s Case: Non-stock, non-profit.

Because paying patient has fee, insofar as the paying patient is
concerned, they are still required to pay taxes.
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As to object:
!  Personal - Those granted directly in favor of
such persons as are within the contemplation
of the law granting the exemption;
!  Impersonal - Those granted directly in favor
of a certain class of property.

Tax exemptions are given because:

1. Public interest will be served by the
exemption allowed; and
2. Such public benefit or interest is
sufficient to offset the monetary loss
entailed in the grant of the exemption

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!  In MCIAA V. MARCOS [261 SCRA 667], the

Supreme Court noted that Section 234 of the
the Local Government Code unequivocally
withdrew exemptions from payments of real
property taxes granted to natural or juridical
persons, including government-owned and
control corporations. Since MCIAA is a GOCC,
it follows that its exemption granted under a
charter prior to the LGC has been withdrawn.
Only so far as GOCC are concerned. If it is Government
Instrumentality it is still exempt from real property tax.

Sin Tax Law

In REPUBLIC V. CAGUIOA [536 SCRA 194] held
that there is no vested right in a tax exemption
and more so when the latest expression of
legislative intent renders it continuance
doubtful. In the said case, RA 7227 granted
private domestic corporations doing business
in the Subic SEZ tax exemptions on
importations of general merchandise. However,
RA 9334 withdrew the tax exemption on the
importations of cigars, cigarettes, distilled
spirits, fermented liquors and wines.

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In NITAFAN V. CIR [152 SCRA 284], the

Supreme Court held that the salaries of
members of the judiciary are subject to income
tax as applied to all taxpayers. The payment of
income tax by Justices and Judges do not fall
within the constitutional protection against
decrease of their salaries during their
continuance in office.

!  The doctrine provides that where the refund

of a tax illegally or erroneously collected or
overpaid by a taxpayer is barred by
prescription, a tax presently being assessed
against a taxpayer may be recouped or set-
off against the tax whose refund is now
barred by prescription. This doctrine is
inapplicable in the Philippines in light of the
lifeblood theory. (UST V. COLLECTOR [104
PHIL. 1062]

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COMPENSATION
And
SET-OFF

!  No.As held in CALTEX VS. COA [208 SCRA

727] , taxes cannot be the subject of
compensation because the government and
taxpayer are not mutually creditors and
debtors of each other. A claim for taxes is not
such a debt, demand, contract or judgment
as is allowed to be set-off

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!  There can be no off-setting of taxes against the

claims that the taxpayer may have against the
government. A person cannot refuse to pay taxes
on the ground that the government owes him an
amount equal or greater than the tax being
collected (PHILEX MINING V. CIR [294 SCRA 687]).

!  Taxes cannot be the subject of set-off because

they are not in the nature of contracts between
parties but grow out of a duty to, and, are
positive acts, of the Government, to the making
and enforcing of which, the personal consent of
the taxpayer is not required (REPUBLIC V.
MAMBULAO LUMBER [4 SCRA 622])

COMPROMISE
AND
TAX AMNESTY

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Compromises are allowed and enforceable

when the subject matter thereof is not
prohibited from being compromised and the
person entering into it is duly authorized to do
so.
In fact, under SECTION 204 OF THE TAX
CODE, payment of internal revenue taxes may
be compromised on the grounds of
(1) doubtful validity of the assessment or
(2) financial incapacity.

Is a general pardon or intentional

overlooking by the State of its authority to
impose penalties on persons otherwise guilty
of evasion or violation of a revenue or tax

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TAX AMNESTY TAX EXEMPTION

Immunity from all criminal, civil Immunity from civil liability only
and administrative liabilities
arising from nonpayment of taxes
immunity
Applies only to past tax periods Has prospective application

THANK YOU!!!

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