Living in a society where there is government that maintains order, peace, rights, privilege and

services is never free. Day to day, directly or indirectly, we benefit from the service that the
Government is providing. For a State to be organized, it imposes its three inherent powers:
Police Power, Power of Eminent Domain and Taxation Power. Police Power is exercised by the
government by controlling and limiting the utilization of property, liberty and freedom of the
people in order to uphold public welfare. The police power if considered the most superior. The
Power of eminent domain is exercised by the government by taking a private owned property
and expropriating it for public use, but it should be noted that there must be a “Just
Compensation” a fair value which is to be determined by court. The most important inherent
power of the state is the Power of Taxation. This power is the most important because without
this, the State cannot exercise all other powers because this serves as the support. It serves as
the life blood of a state because without this the government paralyzed and cannot function well.
Taxation is defined: “Taxation is the process or means by which the sovereign (Independent
state), through its law-making body (the legislature), imposes upon subjects and objects within
its jurisdiction for the purpose of raising revenues to carry out the legitimate objects of
government. In simple terms, it is the act of levying tax to apportion the cost of government
among those who, in some measure, are privileged to enjoy its benefit and must therefore bear
its burden.” (Tabag and Garcia, 2018) This being said, it is the basis of taxation, the price to pay
in order to live in an orderly society.

Tax system must be founded by principles that makes it well founded. The Three Principles of a
Sound tax system are: (1) Fiscal Adequacy, (2) Theoretical Justice, and (3) Administrative
Feasibility. These principles are must for a government to adhere. Fiscal Adequacy necessitates
that the government should have a collection imposition that is sufficient to meet the expenses
and governmental cost. This principle strongly demands there must be no shortfall of collection.
Because taxes are considered life blood of the government, a shortfall of collection will cause a
big negative impact because it would incapacitate the government in sustaining and delivering
the important services needed by the people.

Theoretical Justice states that taxes should be based on the citizen’s ability to pay. It suggests
that exercise of taxation should not be oppressive, unjust, or confiscatory. (Banggawan, 2019).
With this we can justify that taxes should be in proportion to the citizen’s ability to pay as it will
be oppressive to collect big tax to low-income citizen. In that case, the imposition of tax will be
more confiscatory in nature and not of a sound tax system.
Administrative feasibility suggests the tax laws must be capable of effective and efficient
enforcements. (Tabag and Garcia, 2018) This being said, it is not enough for a government to
have tax laws but can’t be effective and efficient. Having tax laws that can’t be enforced are
purposeless as it will be just in vain. It is important to have tax system not being complex
because it will create more hassle to the government and difficult to keep an eye. Clarity on
what is being taxed and the way it is taxed should be of importance for the citizen to
understand. Convenient way associated with efficient collection methods must be implemented
to adhere Administrative Feasibility. Innovations like: Online payments, authorization of bank for
tax payments, substitutive filling system for workers are examples of compliance to this
principle.

References:
Banggawan, R. B. (2019). Income Taxation Laws, Principles and Application(2019 ed)
Pasay default Barangay, Pasay City : REX Publishing

Tabag, E.D..,& Garcia E.J.(2018). Income Taxation with Special Topics on Taxation(2018 ed)
C.M. Recto Avenue, Sampaloc, Manila: PRTC