Concept, Nature and Characteristics of Taxation and Taxes Flashcards
the power to destroy
- tax as a means to destroy a certain industry
- therefore should be exercised with caution to minimize injury to the proprietary rights of the taxpayer
The power to tax is said to be comprehensive, unlimited, plenary and supreme.
What does that mean? (Characteristics of Taxation)
comprehensive - broad coverage
unlimited - not invalidated when it regulates or deters taxed activities
plenary - Must be collected without unnecessary hindrances.
supreme - In the sense of selection of the subject of taxation
The Philippine government’s power to tax is comprehensive, unlimited, and supreme, granting it broad discretion to levy a wide range of taxes without strict limitations. This plenary taxing authority reflects the government’s need to generate revenue for public services, which can supersede individual or business interests. However, the exercise of this power remains subject to constitutional and legal safeguards to prevent excessive taxation or infringement on taxpayer rights.
Aspects/Stages of Taxation
- Levying
- Assessment & Collection
- Payment
Levying of tax
LEGISLATIVE; decides the coverage, object, nature, extent, situs of the tax to be imposed`
Assessment and Collection
EXECUTIVE; Computing the correct amount of tax payable and enforcing
Payment
EXECUTIVE; Actual payment
Which government has the primary role of tax administration in the Philippines?
Bureau of Internal Revenue
Why is Levying Legislative?
involves the creation of law
Purposes of Taxation
generate revenue
(promotion of general welfare, reduction of social inequality, encourage economic growth, protectionism)
Promotion of general welfare
the imposition of a higher tax on vehicles powered by petroleum products such as diesel or gasoline
Reduction of social inequality
Minimum wage exemption law
Encourage economic growth
CREATE law, reduction of the corporate income tax rate, incentives and tax holidays to foreign investors
Protectionism
tariffs and customs
Principles of a sound tax system
Fiscal Adequacy
Administrative Feasibility
Theoretical Justice
Fiscal Adequacy
revenue raised must be sufficient to meet government/public expenditures and other public needs
Administrative Feasibility
the tax system should be capable of being effectively administered and enforced conveniently to the taxpayer.
streamlined and efficient
Theoretical justice
our constitution mandates that the rule on taxation must be uniform and equitable and that the state must evolve a progressive system of taxation
If the principles of a sound tax system are not present, would that invalidate a tax imposition?
No. except if specific constitutional or statutory limitations are impaired
tax imposed on online sellers or influencers. the government is finding it difficult to collect. Would that invalidate because its not feasible?
No.
Lifeblood Theory
taxes are the lifeblood of the government and should be collected without unnecessary hindrance. Government can not exist or function without it
Benefits Protection Theory
- AKA Doctrine of symbiotic relationship
- it involves the power of the state to demand and receive taxes based on the reciprocal duties of support and protection between the state and its citizens
Necessity Theory
- taxation is predicated upon necessity. It is a necessary burden to preserve the state’s sovereignty
- in order for the government to perform its functions
Under theories of taxation, if such protection, government service, government function can no longer be afforded or provided by the state, can the subjects refuse to pay taxes?
- there will be anarchy and systems will collapse because there is no tax to function
- the nonpayment of taxes can not be justified
Taxation
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 and to carry out the legitimate objectives of
government.
Basis of taxation
inherent in a sovereign state because it is a necessary attribute of
sovereignty
Scope of Taxation
the subjects and objects on which taxes are imposed
Is the power to tax required to be explicitly provided in a State’s constitution?
Why or why not?
No because it is an inherent power of state.
Do we have constitutional provisions related to Taxation in our present constitution? Cite some examples. What is the purpose of those Constitutional provisions?
Yes, the current 1987 Constitution of the Philippines contains several provisions related to taxation.
Article X, Section 5 allows local governments to have a just share in national taxes. Section 28 (3), Article VI
These constitutional provisions aim to exercise the government’s taxation powers by ensuring oversight and control over public funds, protecting the independence of the judiciary, providing fiscal autonomy for local governments, and incentivizing the cooperative sector - all with the purpose of promoting sound public finance, equitable distribution of resources, and a healthy economic environment.
similarities of 3 inherent powers of state
They are inherent powers of the State
2. All are necessary attributes of sovereignty
3. They exist independently of the constitution
4. They constitute the three methods by which the State interferes with private rights and property
5. They presuppose equivalent compensation
police power
power to regulate the actions of people to promote general welfare
eminent domain
the power to take private property with just compensation for public purpose
