PUBLIC FISCAL ADMIISTRATION

1. PUBLIC FINANCE is the study of government activities, which may include spending, deficits and
taxation. The goals of public finance are to recognize when, how and why the government
should intervene in the current economy, and also understand the possible outcomes of making
changes in the market. (Villanova University-home-resources-public administration-components
of public finance). Whereas IN PUBLIC FISCAL ADMINISTRATION shall govern the conduct and
management of financial affairs, transactions, and operations of provinces, cities, municipalities
and barangays. (Local Government Code , Title V. Section 304).

2. TAXES
Are enforced proportional contributions from persons and property, levied by the state by virtue
of its sovereignty for the support of the government and for all its public needs ( “Cooley’s
definition,” 1 Cooley 62).

TAXATION is a mode of raising revenue for public purposes.

PRINCIPLES OF A SOUND TAX SYSTEM

A. FISCAL ADEQUACY
Sources of revenues must be adequate to meet government expenditures (Chavez v.
Ongpin, 186 Scra 331 and other public needs. This is in consonance with the doctrine that
taxes are lifeblood of the government.

B. THEORETICAL JUSTICE
A sound tax system must take into consideration the taxpayers’ ability to pay. Our laws
mandate that taxes must be reasonable just, fair and conscionable. Under Article VI, Section
(1) of the Constitution, the rule on taxation must be uniform and equitable. The State must
evolve a progressive system to taxation.

C. ADMINISTRATIVE FEASIBILITY
Tax Laws must be capable of effective and efficient enforcement. They must not obstruct
business growth and economic development. (Tax principles and remedies, Dimaampao,
2018, ed)

3. The Power to Tax is inherent in the State, and the State is free to select the object of taxation,
such power being exclusively vested in the Legislature (Congress). Thus, taxes are the lifeblood
of the nation through which the government agencies continue to operate and with which the
State effects its functions for the welfare of its constituents.

4. It is settled rule that the power to tax carries with it the power to grant tax exemptions. Tax
exemptions and tax reliefs serve as incentives to encourage investments in our local industry
and thereby promote economic growth.
5. The Government Owned and Control Corporation (GOCC), is created by law, in order to build a
just and humane society and establish a government that shall embody our ideals and
aspirations promote the common good, conserve and develop our patrimony and secure to
ourselves.

6. Under the Local Government code Section 314 provides that Local Government budgets shall
primarily consists of two (2) parts:

a. The estimates of income; and

b. The total appropriations covering the current operating expenditures and capital outlays.

7. Inflation (bahala kana po Kuya Rye)

8. On the one hand, Section 3 of Article X of the 1987 Philippine Constitution states that “ No law
be passed exempting any entity of the Government or its subsidiary in any guise whatever, or
any investment of public funds, from the jurisdiction of the Commission on Audit. On the other
hand, under Article X, Section 2 (1) the Commission on Audit shall the power, authority and duty
to examine, audit and settle all accounts pertaining to the revenue and receipts of, and
expenditures or uses of funds and property owned of the Government.