Taxation Law

Question 1

What are the different theories in taxation?

Answer 1

(1) Lifeblood Theory
(2) Necessity Theory
(3) Benefits-Protection Theory
(4) Symbiotic Relationship Theory

Question 2

What is the lifeblood theory in taxation?

Answer 2

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)

Question 3

What is the necessity theory in taxation?

Answer 3

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 Islands, G.R. No. 134062, April 17, 2007, 521 SCRA 373)

Question 4

What is the benefits-protection theory in taxation?

Answer 4

Taxpayers receive benefits from taxes through the protection the State affords to them. For the protection they get arises from their obligation to support the government through the payment of taxes.
(CIR v. Algue, Inc., G.R. No. L-28896, February 17, 1988, 158 SCRA 9)

Question 5

What is the symbiotic relationship theory in taxation?

Answer 5

Taxation arises because of reciprocal relation of protection and support between the State and taxpayers. The State gives protection and for it to continue giving protection, it must be supported by the taxpayers in the form of taxes.
(CIR v. Algue, Inc., G.R. No. L-28896, February 17, 1988, 158 SCRA 9)