Professional Documents
Culture Documents
General Principle
General Principle
0
A. Taxation in General
a.1. Taxation concept inherent power of the State,
through the legislative body, to raise revenues for the
purpose of defraying the expenses of government
Q: Does the Constitution contain a provision granting
taxation power to the State?
A: There is no provision in the Constitution granting such
power. The power to tax is inherent in the State and
therefore requires no constitutional grant in order to exercise
the same. What the Constitution contains are provisions
limiting such power of taxation.
Q: What is meant by the power to tax is the power to
destroy and is it applicable in the Philippine
jurisdiction?
A: The power to tax is the power to destroy is in reference
to the fact that taxation is plenary and therefore generally
unlimited, so that it applies to anything that can be subjected
to tax, even income arising from an illegal enterprise and
even to the extent that it becomes confiscatory. However,
while the power to tax is the power to destroy, this is not so
while the Supreme Court sits, because such power is still
an attribute of sovereignty
inherent
legislative in character
SCOPE:
Legislative taxing power extends to the following:
o
o
situs (jurisdiction)
method of collection
Churchill and Tait v. Concepcion, G.R. No. 11572, Sept. 22,
1916
The power to impose taxes is one so unlimited in force
and so searching in extent, that the courts scarcely venture
to declare that it is subject to any restrictions whatever,
except such as rest in the discretion of the authority which
exercises it. It reaches to every trade or occupation; to every
object of industry, use, or enjoyment; to every species of
possession; and it imposes a burden which, in case of failure
to discharge it, may be followed by seizure and sale or
confiscation of property. No attribute of sovereignty is more
pervading, and at no point does the power of the government
affect more constantly and intimately all the relations of life
than through the exactions made under it." (Cooley's
Constitutional Limitations, 6th Edition, p. 587.)
public
o
State has jurisdiction over the taxpayer
NPC v. City of Cabanatuan, G.R. No. 149110, April 9, 2003
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.
CIR v. Algue, G.R. No. L-28896, Feb. 17, 1988
1.
2.
3.
4.
5.
raise revenue
regulate
promote general welfare
reduce social inequality
encourage economic growth compensatory because
the power to tax necessarily includes the power to grant tax
exemption, providing tax incentives for investors
6.
implement of eminent domain
Sumptuary Purpose of Taxation non-revenue raising
purpose of taxation; refers to regulatory purpose
Caltex Philippines, Inc. v. COA, G.R. No. 92585, May 8, 1992
POLICE POWER: Taxation is no longer envisioned as a
measure merely to raise revenue to support the existence of
the government; taxes may be levied with a regulatory
purpose to provide means for the rehabilitation and
1.
2.
1.
2.
1.
1.
tariff rates
import-export quotas
tonnage and wharfage duties
other duties and imposts within the framework of the
national government program
- LGU (General Welfare Clause)
- administrative agencies:
o
o
o
o
Philippines
o
Non-resident Aliens (whether engaged in business or
not) taxed on all sources within the Philippines
NOTA BENE: Only resident citizens are taxed on all sources of
income within or without the Philippines.
FACTORS AFFECTING SITUS OF TAXATION:
o
o
o
o
o
o
c) Religious Freedom
Art. III, Section 5. No law shall be made respecting an establishment of
religion, or prohibiting the free exercise thereof. The free exercise and
enjoyment of religious profession and worship, without discrimination or
preference, shall forever be allowed. No religious test shall be required for
the exercise of civil or political rights.
d) Non-impairment Clause
Art. III, Section 10. No law impairing the obligation of contracts shall be
passed.
Art. XII, Section 11. No franchise, certificate, or any other form of
authorization for the operation of a public utility shall be granted except
to citizens of the Philippines or to corporations or associations organized
under the laws of the Philippines, at least sixty per centum of whose
capital is owned by such citizens; nor shall such franchise, certificate, or
authorization be exclusive in character or for a longer period than fifty
years. Neither shall any such franchise or right be granted except under
the condition that it shall be subject to amendment, alteration, or repeal
by the Congress when the common good so requires. The State shall
e) Law-Making Process
Art. VI, Section 26. (1) Every bill passed by the Congress shall embrace
only one subject which shall be expressed in the title thereof.
(2) No bill passed by either House shall be come a law unless it has
passed three readings on separate days, and printed copies thereof in its
final form have been distributed to its Members three days before its
passage, except when the President certifies to the necessity of its
immediate enactment to meet a public calamity or emergency. Upon the
last reading of a bill, no amendment thereto shall be allowed, and the
vote thereon shall be taken immediately thereafter, and the yeas and
nays entered in the Journal.
(2) Direct
a) Non-Imprisonment
Art. III, Section 20. No person shall be imprisoned for debt or nonpayment of a poll tax.
Art. VI, Section 28. (1) The rule of taxation shall be uniform and equitable.
The Congress shall evolve a progressive system of taxation.
(2) The Congress may, by law, authorize the President to fix within
specified limits, and subject to such limitations and restrictions as it may
impose, tariff rates, import and export quotas, tonnage and wharfage
dues, and other duties or imposts within the framework of the national
development program of the Government.
(3) Charitable institutions, churches and personages or convents
appurtenant thereto, mosques, non-profit cemeteries, and all lands,
buildings, and improvements, actually, directly, and exclusively used for
religious, charitable, or educational purposes shall be exempt from
taxation.
(4) No law granting any tax exemption shall be passed without the
concurrence of a majority of all the Members of the Congress.
j) Special purpose
Art. VI, Sec. 29 (3): All money collected on any tax levied for a special
purpose shall be treated as a special fund and paid out for such purpose
only. If the purpose for which a special fund was created has been fulfilled
k) Judicial Review
Art. VIII, Section 5. The Supreme Court shall have the following powers:
1) Exercise original jurisdiction over cases affecting ambassadors, other
public ministers and consuls, and over petitions for certiorari, prohibition,
mandamus, quo warranto, and habeas corpus.
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as
the law or the Rules of Court may provide, final judgments and orders of
lower courts in:
(a) All cases in which the constitutionality or validity of any treaty,
international or executive agreement, law, presidential decree,
proclamation, order, instruction, ordinance, or regulation is in question.
(b) All cases involving the legality of any tax, impost, assessment, or toll,
or any penalty imposed in relation thereto.
(c) All cases in which the jurisdiction of any lower court is in issue.
(d) All criminal cases in which the penalty imposed is reclusion perpetua
or higher.
(e) All cases in which only an error or question of law is involved.
m) Tax exemptions
Art. XIV, Sec. 4 (3): All revenues and assets of non-stock, non-profit
educational institutions used actually, directly, and exclusively for
educational purposes shall be exempt from taxes and duties. Upon the
dissolution or cessation of the corporate existence of such institutions,
their assets shall be disposed of in the manner provided by law.
Sec. 30(H), NIRC: Exemptions from Tax on Corporations -- A nonstock and
nonprofit educational institution.
C. Tax
c.1. Tax Defined, Characteristics
Tax enforced proportional contributions, generally payable
in money, from persons, property, rights and privileges levied
by the legislative body of the State by virtue of its
sovereignty for the support of government and for public
needs.
c.2. Kinds of Taxes
As to subject or object
personal>
propertyAs to who bears the burden
o
o
direct
indirect
CIR v. PLDT, G.R. No. 140230, Dec. 15, 2005
DIRECT v. INDIRECT TAX: based on the possibility of shifting
the incidence of taxation. Direct taxes are those that are
exacted from the very person who, it is intended or desired,
should pay them; impositions for which a taxpayer is directly
liable on the transaction or business he is engaged in.
Indirect taxes are those that are demanded, in the first
instance, from, or are paid by, one person in the expectation
and intention that he can shift the burden to someone else;
liability for the payment falls on one person but the burden
can be shifted or passed on to another person, such as when
the tax is imposed ex. VAT, advance sales tax,
compensating tax upon goods before reaching the
consumer who ultimately pays for it. When the seller passes
on the tax to his buyer, he, in effect, shifts the tax burden,
not the liability to pay it, to the purchaser as part of the price
of goods sold or services rendered.
By tacking the VAT due to the selling price, the seller remains
the person primarily and legally liable for the payment of the
tax. What is shifted only to the intermediate buyer and
ultimately to the final purchaser is the burden of the tax.
Stated differently, a seller who is directly and legally liable for
payment of an indirect tax, such as VAT on goods and
services, is not necessarily the person who ultimately bears
the burden of the same tax. It is the final purchaser or enduser of such goods or services who, although not directly and
legally liable for the payment thereof, ultimately bears the
burden of the tax.
As to determination of amount
o
o
specific
ad valorem
As to purpose
o
o
general
special
As to rate
o
o
o
progressive
regressive
proportional
As to imposing authority
o
o
national
local
c.3. Tax distinguished from other impositions
v. SPECIAL ASSESSMENT
1.
1.
v. PENALTY
1.
1.
1.
2.
3.
4.
NIRC
Constitution
Tariff and Tax Code
Local Government Code
NOTA BENE: Tax laws are civil in nature, therefore, the rule
on ex post facto law prohibition does not apply. Tax laws may
not be given retroactive effect, even if they are favorable to
the taxpayers. Tax laws are likewise not political, therefore,
they still apply even if there is a change in government to a
belligerent.
c.5. Interpretation of Tax Laws
Strictissimi juris strictly interpreted against the
government and liberally in favor of the taxpayer because it
involves the imposition of a tax burden
- EXCEPTION: Tax exemptions are strictly interpreted against
the taxpayer and liberally in favor of the government because
of the life-blood theory and the equal protection clause
(exemptions are privileges, therefore, encourages inequality
among taxpayers)
Sea Land Service v. CA, G.R. No. 122605, April 30, 2001
STRICTISSIMI JURIS in TAX EXEMPTION: Laws granting
exemption from tax are construed strictissimi juris against
the taxpayer and liberally in favor of the taxing power.
Taxation is the rule and exemption is the exception. The law
does not look in favor on tax exemptions and that he who
would seek to be thus privileged must justify it by words too
plain to be mistaken and to categorical to be misinterpreted.
PURPOSE OF TAX EXEMPTION: Some public benefit or
interest, which the lawmaking body considers sufficient to
affect the monetary loss entailed in the grant of the
exemption.
CIR v. CA, G.R. No. 107135, Feb. 23, 1999
RULE ON EXCEPTIONS: Exceptions, as a general rule, should
be strictly but reasonably construed. They extend only so far
as their language fairly warrants, and all doubts should be
resolved in favor of the general provisions rather than the
exception. Where the general rule is established by statute
with exceptions, the court will not curtail the former nor add
to the latter by implication.
STRICTISSIMI JURIS in TAX LAWS: Tax burdens are not to be
imposed, nor presumed to be imposed beyond what the
statute expressly and clearly imports, tax statutes being
construed strictissimi juris against the government.
educational purposes shall be exempt from taxes and duties. Upon the
dissolution or cessation of the corporate existence of such institutions,
their assets shall be disposed of in the manner provided by law.
Proprietary educational institutions, including those cooperatively owned,
may likewise be entitled to such exemptions, subject to the limitations
provided by law, including restrictions on dividends and provisions for
reinvestment.
CONSTITUTIONAL RESTRICTIONS
Art. VI, Sec. 28(4): No law granting any tax exemption shall be passed
without the concurrence of a majority of all the Members of the Congress.
REVOCATION, RESTRICTION
NOTA BENE:
o
o
1.
2.
Related Posts:
0 comments:
Post a Comment
Blog Archive
Total Pageviews
389,329
Labels
Exams (4) Blog (15) Books (4)
Bar
Digests (131)
Civil
Primer (15)
Case
Law (38)Commercial
Law (15) Law
Ethics (1)Legal
Legal
(41) Political
Law (18) Remedial