PART I – GENERAL PRINCIPLES OF TAXATION

MODULE 1 - Concept and Nature of Taxation and its Characteristics

TOPIC 1

1. Definition

Taxation vs. Taxes

2. Nature of the Power of Taxation/Aspects of Taxation

(1) Inherent in Sovereignty

- What provision of the Constitution that grants the power?

- CIR vs. Algue, G.R. No. L-28896, February 17, 1988

(2) Legislative in character

(3) Subject to constitutional limitations and inherent limitations (to be discussed in MODULE 3)

1. Sources of the Power of Taxation and its Exercise

- Distinguish States’ Power vs. Legislative Power in the exercise of the Power of Taxation

- Aspects of Taxation

(1) Levy

- Who has the power to levy?

(2) Assessment & Collection

- Who has the duty to assess and collect the tax?

- Distinguish the exercise of the Power between the Executive Branch and the

Legislative Branch as to the aspects of Taxation

- Distinguish the exercise of the Power between the National Government and

the Local Government (Sec. 5, Art. X, 1987 Constitution)

TOPIC 2

2. Theory and Basis of Taxation

(1) Necessity Doctrine

(2) Lifeblood Doctrine

(3) Symbiotic Relationships or M.U. theory

(4) Imprescriptibility of Taxes

- CIR vs. Ayala Securities, G.R. No. L-29485, November 21, 1980

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 TOPIC 3

3. Characteristics of the Tax.

(1) Rationale why it is an enforced contribution

(2) Doctrine of being proportionate in character

(3) Reason why generally payable in money

(4) Objects/Subject of Taxation in relation to Classification of Taxes as to subject matter

(5) Jurisdiction to levy

OBJECT/SUBJECT OF TAXES

- Within the Philippines

- Without the Philippines

- Within and without the Philippines

(6) Extent of the of the legislative power to tax

1. Scope of Legislative Power to Tax

- Petron vs. Pililla, G.R. No. 90776, June 3, 1991

- CREBA Inc. vs. Romulo, G.R. No. 160756, March 9, 2010

- People vs. Sandiganbayan, 467 SCRA 137

- Tax Pyramiding

2. Judicial Review of Taxation

- Roxas vs. CTA, G.R. No. L-25043, April 26, 1968

3. Extent of the Taxing Power

- Tio vs. Videogram Regulatory Board, G.R. No. 75697, June 18, 1987

4. Test in Determining Whether the Imposition is a Tax or a License Fee

- Progressive Dev. Corp. vs. Quezon City, G.R. No. L-36081, April 24, 1989

5. Taxpayer’s Suit

- Locus Standi/Injunction

- Maceda vs. Macaraig, 197 SCRA 771

- Chavez vs. NHA, 530 SCRA 235

- Talento vs. Escalada, Jr. 556 SCRA 491

- Coconut Oil Refiners Assoc., Inc. vs. Torres, G.R. No. 132527, July 29, 2005

- Is the power to tax, a power to destroy?

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 (7) Public Purpose

- its meaning

TOPIC 4

1. Basic Principles of a sound Tax System

MODULE 2 - CLASSIFICATION AND DISTINCTIONS

TOPIC 1

I. CLASSIFICATIONS

1. As to subject or object

- Meaning of Personal Tax, Property Taxes, Excise Taxes and limit of jurisdiction

2. As to who bears the burden (Direct Tax vs. Indirect Tax)

- CIR vs. Gotamco, G.R. No. L-31092, February 27, 1987

- CIR vs. Amercian Rubber, G.R. No. L-19667, November 29, 1966

- Phil. Acetylene Co, Inc. vs. CIR, G.R. No. L-19707, August 17, 1967

- Maceda vs. Macaraig, G.R. No. 88291, May 31, 1981

- Silkair vs. CIR, G.R. No. 173594, February 6, 2008

3. Revenue objective vs. Non-Revenue objective

Cases:

- Gerochi vs. Department of Energy (supra)

- COCOFED vs. PCGG, 178 SCRA 236 (1989)

- Caltex vs. COA, 208 SCRA 738

- Osmeña vs. Orboz, 220 SCRA 703

- Tañada vs. Angara, 272 SCRA 18

- Philhealth Care vs. CIR, 554 SCRA 411

4. Regressive Tax vs. Progressive Tax

5. Regressive System of Taxation vs. Progressive System of Taxation

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 TOPIC 2

6. Tax distinguished from:

(1) Toll

(2) Penalty

(3) Special Assessment

(4) License or Permit Fee

(5) Debt

- Republic vs. Mambulao, G.R. No. L-17725, February 28, 1962

- Philex Mining vs. CIR, 294 SCRA 687

- Domingo vs. Garlitos, 8 SCRA 443

- Francia vs. IAC, G.R. No. L-67649, June 28, 1988

- CIR vs. Pineda, 21 SCRA 105

- Borja vs. Gella, G.R. No. L-18330, July 31, 1963

- CIR vs. Cebu Portland Cement, G.R. No. L-29059, December 15, 1987

TOPIC 3

II. 1. Concept of Taxation vs.:

(1) Eminent Domain

(2) Police Power

- Similarities of the three inherent domain powers

- Distinction among the three powers

a. Can the Police Power be used in Taxation?

b. Can the Power of Eminent Domain be used in Taxation?

1. Gerochi vs. Dept. of Energy, 527 SCRA 696

2. Lutz vs. Araneta, G.R. No. L-7859, December 22, 1955

3. Tio vs. Videogram, G.R. No. L-75697, June 18, 1987

4. CIR vs. Central Luzon Drug Corp., G.R. No. 159647, April 15, 2005

5. Carlos Super Drug Corp. vs. DSWD, G.R. No. 166494, June 29, 2007

6. Manila Memorial Park, Inc. vs. Secretary of DSWD, G.R. No. 175356,

December 3, 2013