Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
6Activity
0 of .
Results for:
No results containing your search query
P. 1
Taxation-Law-Proper.pdf

Taxation-Law-Proper.pdf

Ratings: (0)|Views: 134|Likes:
Published by Gerry Micor

More info:

Published by: Gerry Micor on Jan 22, 2013
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

06/20/2013

pdf

text

original

 
G
ENERAL
P
RINCIPLES
 
1
U
N I V E R S I T Y O F
S
A N T O
T
O M A S
 
Facultad de Derecho Civil
 
A
CADEMICS
C
HAIR
:
 
L
ESTER
J
AY
A
LAN
E.
 
F
LORES
II
 
V
ICE
C
HAIRS
F
OR
A
CADEMICS
:
 
K
AREN
 
J
OY
G.
 
S
ABUGO
&
 
J
OHN
H
ENRY
C.
 
M
ENDOZA
 V
ICE
C
HAIR FOR
M
ANAGEMENT AND
F
INANCE
:
 
J
EANELLE
C.
 
L
EE
 
V
ICE
C
HAIRS FOR
L
AYOUT
A
ND
D
ESIGN
:
 
E
ARL
L
OUIE
M.
 
M
ASACAYAN
&
 
T
HEENA
C.
 
M
ARTINEZ
 
GENERAL PRINCIPLESDEFINTION AND CONCEPT OF TAXATIONQ: Define taxation.A:
It is an inherent power by which the sovereign:1.
 
through its law-making body2.
 
raises income to defray the necessaryexpenses of government3.
 
by apportioning the cost among thosewho, in some measure are privileged toenjoy its benefits and, therefore, mustbear its burdens.
(51 Am.Jur. 34)
Note:
Simply stated, the power of taxation is thepower to impose burdens on subject and objectswithin its jurisdiction.
NATURE OF TAXATIONQ: What is the nature of the power to tax?A:
The nature of the power to tax is two-fold:1.
 
inherent and2.
 
legislative.
Inherent Attribute of SovereigntyQ: Why is the power of taxation consideredinherent in nature?A:
It is inherent in character because its exerciseis guaranteed by the mere existence of the state.It could be exercised even in the absence of aconstitutional grant. The power to tax proceedsupon the theory that the existence of agovernment is a necessity and this power is anessential and inherent attribute of sovereignty,belonging as a matter of right to everyindependent state or government (
Pepsi-ColaBottling Co. of the Philippines
. Municipality of Tanauan, Leyte, G.R. No. L-31156, February 27,1976).
 
No sovereign state can continue to exist withoutthe means to pay its expenses; and that for thosemeans, it has the right to compel all citizens andproperty within its limits to contribute, hence, theemergence of the power to tax.
(51 Am. Jur. 42)
The moment a state exists, the power to taxautomatically exists.
Basis:
The Life-blood Doctrine.
“Without taxes, the government would be
paralyzed for lack of motive power to activateand operate it. Hence, despite the natural
reluctance to surrender part of one’s earned
income to the taxing authorities, every personwho is able must contribute his share in the
running of the government.”
(CIR v. Algue, G.R.No. L-28896, February 17, 1988)
Manifestations:1.
 
Imposition even in the absence of constitutionalgrant2.
 
State’s right to select objects and subjects of 
taxation3.
 
No injunction to enjoin collection of taxes.4.
 
Taxes could not be the subject of compensationand set-off.5.
 
A valid tax may result in destruction of property.
Q: May a legislative body enact laws to raiserevenues in the absence of constitutionalprovisions granting said body the power of tax?Explain.A:
Yes.
 
It must be noted that Constitutionalprovision relating to the power of taxation do notoperate as grants of the power of taxation to thegovernment, but instead merely constitute alimitation upon a power which would otherwisebe practically without limit.
(2005 Bar Question)Q: Distinguish National Government from LocalGovernment Unit as regards the exercise of power of taxation.A:
1.
 
National Government
 –
inherent2.
 
Local Government Unit
 –
not inherentsince it is merely an agency institutedby the State for the purpose of carryingout in detail the objects of thegovernment; can only impose taxeswhen there is:a.
 
Constitutionally mandatedgrantb.
 
Legislative grant, derived fromthe
1987 Constitution, Section5, Article X 
.
Legislative in CharacterQ: Why is the power of taxation legislative innature?A:
It is legislative in nature since it involvespromulgation of laws. It is the Legislature whichdetermines the coverage, object, nature, extentand situs of the tax to be imposed.
 
UST
 
G
OLDEN
N
OTES
2011
2
T
AXATION
L
AW
T
EAM
:
 
A
DVISER
:
 
A
TTY
.
 
P
RUDENCE
A
NGELITA
A.
 
K
ASALA
;
 
S
UBJECT
H
EAD
:
 
R
ODOLFO
N.
 
A
NG
J
R
.;
 
A
SST
.
 
S
UBJECT
H
EADS
:
 
E
DISON
U.
 
O
RTIZ
&
 
V
ANNESSA
R
OSE
S.
 
H
ERNANDEZ
;
 
M
EMBERS
:
 
J
OSE
D
UKE
B
AGULAYA
,
 
C
HARLES
L.
 
G
RANTOZA
,
 
C
HRISTINE
L.
 
G
UTIERREZ
,
 
C
LARABEL
A
NNE
R.
 
L
ACSINA
,
 
D
IVINE
C.
 
T
EE
,
 
K
EITH
S.
 
V
ALCOS
 
Q: May the power of taxation be delegated?A:GR:
No, since it is essentially a legislativefunction.
This
is based upon the principle that “taxes are a
grant of the people who are taxed, and the grantmust be made by the immediate representativesof the people. And where the people have laid the
power, there it must be exercised.” (
Cooley 
)
XPNs:
 
1.
 
To local governments in respect of matters of local concern to be exercisedby the local legislative bodies thereof.
(Sec. 5, Art. X, 1987 Constitution)
2.
 
When allowed by the Constitution.
Note:
The Congress may, by law,authorize the President to fix withinspecified limits, subject to such limitationsand restrictions as it may impose, tariff rates, import and export quotas, tonnageand wharfage dues and other duties orimposts within the framework of thenational development program of thegovernment.
(Sec. 28 [2], Art. VI, 1987 Constitution)
3.
 
When the delegation relates merely toadministrative implementation thatmay call for some degree of discretionary powers under a set of sufficient standard expressed by law(
Cervantes v. Auditor General, G.R. No.L-4043, May 26, 1952)
or implied fromthe policy and purpose of the act.
(Maceda v. Macaraig,G.R. No. 88291,  June 8, 1993)
 
Note:
Technically, this does not amount toa delegation of the power to tax becausethe questions which should bedetermined by Congress are alreadyanswered by Congress before the tax lawleaves Congress.
Q: What is the scope of legislative power intaxation?A:
The following are the scope of legislativepower in taxation:1.
 
The determination of: [
SAP-MAKS]
 a.
 
S
ubjects of taxation (persons,property, occupation, excises orprivileges to be taxed, providedthey are within the taxing jurisdiction)b.
 
A
mount or Rate of taxc.
 
P
urposes for which taxes shall belevied provided they are publicpurposesd.
 
M
ethod of collection
Note:
This is not exclusive toCongress.
e.
 
A
pportionment of the tax (whetherthe tax shall be of generalapplication or limited to aparticular locality, or partly generaland partly local)f.
 
K
ind of tax to be collectedg.
 
S
itus of taxation2.
 
The grant tax exemptions andcondonations.3.
 
The power to specify or provide foradministrative as well as judicialremedies
(Philippines PetroleumCorporation v. Municipality of Pililla,G.R. No.85318, June 3, 1991).
Q: In order to raise revenue for the repair andmaintenance of the newly constructed City Hallof Makati, the City Mayor ordered the collection
of P1.00, called “elevator tax”, every time a
person rides any of the high-tech elevators in theCity Hall during the hours of 8am to 10am and4pm to 6pm. Is the elevator tax a validimposition?
 
A:
No. The imposition of a tax, fee or charge orthe generation of revenue under the LocalGovernment Code, shall be exercised by theSanggunian of the local government unitconcerned through an appropriate ordinance
[Sec. 132, LGC]
. The city mayor alone could notorder the collection of the tax; as such, the
“elevator tax” is an invalid imposition.
(2003 BarQuestion)
Q: Discuss the Marshall dictum “The power totax is the power to destroy” in the Philippine
setting.A:
The power to tax includes the power todestroy. Taxation is a destructive power whichinterferes with the personal and property rightsof the people and takes from them a portion of their property for the support of thegovernment.
(McCulloch vs. Maryland, 4 Wheat,316 4 L ed. 579, 607)
 
Note:
It is more reasonable to say that the maxim
“the power to tax is the power to destroy” is to
describe not the purposes for which the taxingpower may be used but the degree of vigor with
 
G
ENERAL
P
RINCIPLES
 
3
U
N I V E R S I T Y O F
S
A N T O
T
O M A S
 
Facultad de Derecho Civil
 
A
CADEMICS
C
HAIR
:
 
L
ESTER
J
AY
A
LAN
E.
 
F
LORES
II
 
V
ICE
C
HAIRS
F
OR
A
CADEMICS
:
 
K
AREN
 
J
OY
G.
 
S
ABUGO
&
 
J
OHN
H
ENRY
C.
 
M
ENDOZA
 V
ICE
C
HAIR FOR
M
ANAGEMENT AND
F
INANCE
:
 
J
EANELLE
C.
 
L
EE
 
V
ICE
C
HAIRS FOR
L
AYOUT
A
ND
D
ESIGN
:
 
E
ARL
L
OUIE
M.
 
M
ASACAYAN
&
 
T
HEENA
C.
 
M
ARTINEZ
 
which the taxing power may be empoloyed in orderto raise revenue.
(Cooley)
.
Q: Justice Holmes once said: “The power to Tax
is not the power to destroy while this court
(Supreme Court) sits”.
Explain.A:
While taxation is said to be the power todestroy, it is by no means unlimited. When alegislative body having the power to tax a certainsubject matter actually imposes such aburdensome tax as effectually to destroy theright to perform the act or to use the propertysubject to the tax, the validity of the enactmentdepends upon the nature and character of theright destroyed. If so great an abuse ismanifested as to destroy natural andfundamental rights which no free governmentconsistently violate, it is the duty of the judiciaryto hold such an act unconstitutional.
Q: How will you reconcile the two dicta?A:
The power to tax involves the power todestroy since the power to tax includes thepower to regulate even to the extent of prohibition or destruction, as when the power totax is used validly as an implement of policepower in discouraging and prohibiting certainthings or enterprises inimical to the publicwelfare.While the power to tax is so unlimited in forceand so searching in extent that the courtsscarcely venture to declare that it is subject toany restrictions whatever, it is subject to theinherent and constitutional limitations which areintended to prevent abuse on the exercise of theotherwise plenary and unlimited powers. It is the
court’s role to see to it that the exercise of the
power does not transgress these limitations.
 
The power to tax therefore, must not beexercised in an arbitrary manner. It should beexercised with caution to minimize injury toproprietary rights of a taxpayer. It must beexercised fairly, equally and uniformly, lest thetax collector kill the hen that lays the golden egg.
(Roxas et. al vs. CTA et. al, L-25043, April 26,1968)
 Taxpayers may seek redress before the courts incase of illegal imposition of taxes andirregularities. The Constitution, as thefundamental law, overrides any legislative orexecutive act that runs counter to it. In any case,therefore, where it can be demonstrated that thechallenged statutory provision fails to abide by itscommand, then the court must declare andadjudge it null. (
Sison Jr. v. Ancheta, G.R. No. L-59431, July 25, 1984)
Note:
 
Marshall’s view refers to a valid tax whileHolmes’ view refers to an invalid tax.
 
Q: Is taxation subject to judicial review?A:
 
GR:
Courts have no power to inquire orinterfere in the
w
isdom,
o
bjective,
m
otive or
e
xpediency in the passage of a tax law, thisbeing purely legislative in character.
(Tolentino v. Sec. of Finance,G.R. No.115455,  August 25, 1994)
XPN:
The courts may examine legislative actsif they violate applicable constitutionallimitations or restrictions.
Q: The NIRC was amended by BP 135, effectivelybroadening the rates of tax on individual income
taxes. Sison brought a taxpayer’s suit alleging
that the amendatory provision was arbitrary,amounting to class legislation, oppressive andcapricious in character. He concludes that boththe equal protection and due process clauseshad been transgressed, as well as the rulerequiring uniformity in taxation. In responsethereto, the Solicitor General stated in hisanswer that BP 135 is a valid exercise of the
State’s power to tax. Decide.
 A:
Being an attribute of sovereignty, the power totax is the strongest of all the powers of government. So powerful that Chief Justice
Marshall once said that, “the power to taxinvolves the power to destroy.” However, the
power to tax is restricted by the equal protectionand due process clauses of the Constitution.Hence, Justice Frankfurter could rightfully
conclude: “The web of unreality spun fromMarshall’s famous dictum was brushed away byone stroke of Mr. Justice Holmes’s pen statingthat “The power to tax is not the power to
destroy while this c
ourt sits.” So it is in the
Philippines.

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->