Local Taxation and Fiscal Administration

REPORTER: Frances Jamey Ibasco

Frances Jenny Ibasco

Eva Balane

Jeff Olitoquit

One of the inherent powers of the State is taxation and it

was said as the lifeblood of the state for it to survive and to

sustain the entire function and system of the Government.

Taxation is a tool commonly used by government as a means of

redistributing income amongst its citizens. In some instances,

taxation can have a positive effect on the redistribution of

income, other times, it can do more harm than good. Taxation

helps greatly in the redistribution of income as it gives the

government funds which they can use to fund public services.

In countries that have solid taxation systems, revenue from

taxes will be great. The more revenue there is coming from taxes,

the more money there will be left over for the government to

provide public services to its citizens. Without the tax revenue

that taxation offers, services such as protection from national

police, provision of a transportation infrastructure, social

security services, etc,. Social security services like welfare

check programs help spread the wealth around a nation. The

national Government is empowered to exercise levying taxes, and

since the National Government create Local Government Units and

because of the theory and principle of decentralization the

National Government empowered the Local Government Unit to levy

taxes within its territorial and Political jurisdiction. Before

the Local Government Code of 1983 and the Present one 1991 the

authority of taxation of Local Government Unit was very limited.

The New Code give the Local Government Unit with increase powers

to tax thereby empowering them with a wider capacity to raise

their own revenues within their respective territorial

jurisdiction and those taxes fees and charge shall accrue

exclusively to the Local Government Unit. Unlike the National

Government the power to levy tax is not inherent to the Local

Government Units, but during the advent of the New Code it gives

them power to levy tax and certain provision of the code clearly

stated that the Province, cities, Municipalities, and Barangays

were given such authority to exercise Taxation. To levy a tax

means to impose or to charge or to collect a tax from those to

whom it is addressed. Technically however, to levy is to pass on

laws or ordinances imposing a tax or duty upon specific group of

taxpayers. Under this concept, the impelling reason for the

imposition of the tax must be the welfare of the public, in

general. To delegate is to pass on or to entrust to another a

certain duty or obligation. Power to tax is lodged with the

legislative department. To my mind, this is because the

legislative branch is theoretically the representative of the

people and they are directly aware and in common contact with the

instances and situations of their districts making them the ones

knowledgeable of how best their district could be affected by the

new taxes imposed. Independent states power of taxation is

generally confined only within its jurisdiction to give due

respect and as courtesy to other states. A state, as a rule, can

only impose and implement tax laws and rules within its

jurisdiction in accordance with its wishes. Outside its

jurisdiction, it is without power to do so. But then, it can tax

on citizens or entities of other states doing a trade or business

or deriving income within the jurisdiction of its state. By

nature, power to tax is inherent in a sovereign estate so that

the grant of which is not necessary but the exercise is provided

safeguards and limitations. This means that the state needs not

be empowered by its constitution or any mandate for it to be

allowed to tax. Such power co-exists with the state and thus,

grant is not necessary. What are being provided by the supreme

law of the land, the Constitution, are the guidelines and the

limit on the exercise of the power.

If we can see taxes as a fee that we spend on ourselves for

our own benefit, much like the money we pay at a restaurant to

have a nice meal, we would find it easier to pay our taxes

without feeling the pinch. Although we do not like the fact that

we have to part with our earnings to support the government, we

still have to see this as a benefit. In fact, we are paying the

government to provide all the infrastructural facilities that we

enjoy in our day to day life. Taxes are extremely essential for

the smooth running of a nation. Without taxes, the government

would not be able to fulfill its obligations. It is necessary for

us to get a proper perspective of why taxes are inevitable