GENERAL PRINCIPLES AND CONCEPTS OF TAXATION
INHERENT POWER OF THE STATE: (PET)
 Police Power – power to regulate for the
promotion of public good.
 Eminent Domain Power – power to take
private property for a public purpose
without just compensation.
 Taxation Power – to raise revenue to
finance govt. expenditures.
PRINCIPLES OF SOUND TAX SYSTEM (AFE)
 Fiscal Adequacy – sufficient to meet the
demands of public expenditures
 Administrative Feasibility – capable of
convenient, just and effective
administration.
 Equality or Theoretical Justice – based on
ability to pay.
ESSENTIAL ELEMENTS OF TAXATION
 Enforced contribution
 Generally payable in money
 Proportionate in character
 Imposed on persons, property, or exercise
of right or privilege
 Imposed by lawmaking body of state.
 Imposed for public purpose.
STAGES OF TAXATION (LAC)
 Levying/Imposition of tax
 Assessment
 Collection of tax
SCOPE OF THE POWER OF TAXATION:
The power of taxation is comprehensive, plenary,
unlimited and supreme. This power is, however,
subject to inherent and constitutional limitation.
“Without taxes, no government can function” - Lifeblood Theory
#hrjtsngh
CHARACTERISTIC OF THE STATE’S POWER TO TAX
 Inherent
 Legislative
 Subject to limitations
INHERENT LIMITATIONS (D’ PENTI)
 Double Taxation
 For public purpose
 Exemption from taxation of govt. entities
 Non-delegation of legislative power to tax
 Territorial Jurisdiction
 International Comity
CONSTITUTIONAL LIMITATION
 Due process of law
 Equal protection of law
 Rule of uniformity and Equity
 Non-impairment of contract
 President’s power to veto
 Exemption from real property tax pf
religious, charitable or educational entities,
nonprofit cemeteries, churches, convents
appurtenant thereto.
 No public money shall be appropriated for
religious purposes
 Majority of all the members of the Congress
required in gramting tax exemption.
 Supreme Court’s Final Judgement in all tax
cases.
 No imprisonment for non-payment of poll
tax
 Taxes as general fund of the government.