CHAPTER 1

INHERENT POWERS OF THE STATE

Command, maintain peace and order, and
survive.
- Constitution does not grant powers, they
merely set limitations.
1. POLICE POWER
o safety and welfare of society
(health, welfare and morals)
o May be exercised through taxation

Enactment: Legislative branch > Congress

Implementation: Executive branch > BIR
3. Means
a. A way of collecting and
apportioning cost of
government

Restricted by: Due process clause (no one shall

be deprived of life, liberty, property)
i.e. Preservation of natural resources,
segregation of lepers from public,
imprisonment of convicted criminals, and
regulation of professions (PRC)

NATURE OF TAXATION POWER

-

2. EMINENT DOMAIN POWER

o take private property (national
welfare interest)
o common necessity and interests
of the community transcend
individual rights in property.
Restricted by: Just compensation
3. TAXATION POWER
o Enforce contributions (Supports
other powers)

Objective: Support Services of Government

Fundamental Basis: To provide benefits and
supports to its people.
Taxation Defined:
1. Power
a. Refers to inherent powers
b. Demand contributions to
support the government and
pay its necessary expenses
2. Process
a. Legislative undertaking

1. Inherent power of sovereignty;

Taxation is as old as government and exists
with the four elements of the state: people,
territory, sovereignty, and government.
The state has the supreme power to
command and enforce obedience from
people in its jurisdiction.
Only the national government has this
inherent powers and not the local
government. Local government or political
subdivisions may exercise if:
o Expressly authorized by constitution
o Valid delegation by national
legislature. (Like the Local
Government Code of the
Philippines.)
2. Essentially a legislative function;
Only the Congress may impose/enact laws
and ordinances.
Non-delegation of legislative power to tax.
o Peculiarly and Exclusively legislative
o May not be exercised by executive
or judicial branch.
Delegated to LGU? Only the legislative may
exercise.
Delegated to President? Administrative
discretion only.
Administrative power (MINISTERIAL AND
ADVISORY) may be delegated.
3. For public purpose;
Must only be for public purpose or general
welfare.
Common good of the people or Greater
portion of its population.

4. Territorial in operation;
Observe Tax Situs
Effective only within territorial limits except
when:
o Privity of relationship exists
o Tax Principle: Reciprocal Duties
o May still tax citizen outside country

Taxation must observe: International Comity

-

Respect laws of other states

Principle: Sovereign Equality
Eg: May not tax properties used by
diplomats or heads of states as they
exercise sovereign and diplomatic fuctions.
5. Tax exemption of government;
State may not be taxed without its consent.
o Applies only to government entities
immediately and directly exercising
governmental functions. (AFP)
o Proprietary fuctions? Subject to tax
unless provided otherwise.
o Governmental Fuctions? Exempt
from tax unless provided otherwise.
6. The strongest among the inherent
powers of the government;
Other powers may not fuction without
taxation.
7. Subject to constitutional and inherent
limitations

SIMILARITIES AMONG THE THREE POWERES

1.
2.
3.
4.
5.
6.

Inherent in Sovereignty
They are all necessary: No effective government without them
Ways the state interferes with privates rights and property
Legislative in nature and character
Presuppose equivalent compensation
Constitution provisions are just limitations

DIFFERENCES OF THE THREE POWERS.

Concept
Scope
Authority
Purpose
Delegation
Person
affected
Benefits
Amount
imposed
Importance
Constitution
Limitations

Taxation
Raise funds
Plenary, comprehensive,
supreme

Police Power
General Welfare
Broader: Make and
implement laws

Exercised only government or political subdivisions

Support the government

Supports other powers

Inferior to nonimpairment clause
Subject to
CONSTITUIONAL AND
INHERENT Limitations

May be granted to public utility or

public service company
Public use
YES

Community or class of individual

UNLIMITED

Take private property for public

use

General welfare (Take or

destroy)

NO

Healthy economic
standard

Eminent Domain

Continuous protection and

organized society
Cost of regulation, license
other necessary expenses
Welfare of society
Superior to non-impairment
clause
1. Relatively Free from
CONSTITUTIONAL
Limitations
2. Due Process

Specific private property

Market value of the property/ use
of it to society
None.
Public > Private needs
Superior to and may override
non-impairment clause
1. Public Purpose
2. Just Compensation

IMPORTANCE OF TAXATION