In progress - General Principles

Question 1

The mere existence of a State presupposes the power of taxation.

Answer 1

True

Taxation is an inherent power of the State.

Question 2

What are the essential characteristics of taxation?

Answer 2

1. It is an inherent power of the State.
2. It is legislative in character.
3. It is subject to inherent and constitutional limitations.

Question 3

What are the subjects of taxation?

Answer 3

1. Person
2. Property
3. Exercise of a right or privilege

Question 4

What is the theory behind the exercise of the power to tax?

Answer 4

Necessity Theory
Lifeblood Doctrine

Taxes are the lifeblood of the government, for without taxes, the government can neither exist nor endure. A principal attribute of sovereignty, the exercise of taxing power derives its source from the very existence of the state whose social contract with its citizens obliges it to promote public interest and common good. The theory behind the exercise of the power to tax emanates from necessity; without taxes, government cannot fulfill its mandate of promoting the general welfare and well-being of the people. (National Power Corporation vs. City of Cabanatuan)

Question 5

Explain the Lifeblood Doctrine and the Necessity Theory.

Answer 5

Lifeblood Doctrine – Without revenue raised from taxation, the government will not survive, resulting in detriment to society. Without taxes, the government would be paralyzed for lack of motive power to activate and operate it. (CIR v. Algue, Inc., G.R. No. L-28896, February 17, 1988, 158 SCRA 9)

Necessity Theory – The exercise of the power to tax emanates from necessity, because without taxes, government cannot fulfill its mandate of promoting the general welfare and well being of the people. (CIR v. Bank of Philippine Islads, G.R. No. 134062, April 17, 2007, 521 SCRA 373)