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Basis of Taxation:: Benefits-Protection Theory

Taxes are mandatory financial contributions imposed by governments to fund public services. There are six essential characteristics of taxes, including that they are forced charges levied by the state for public purposes. Governments have the right to collect taxes based on two theories: the necessity theory, which is that governments need funds to provide services; and the lifeblood doctrine, which is that taxes are essential for a government's survival. Taxes are considered the reciprocal duty of citizens in exchange for the benefits of protection, security, and a civilized society provided by the government.

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761 views2 pages

Basis of Taxation:: Benefits-Protection Theory

Taxes are mandatory financial contributions imposed by governments to fund public services. There are six essential characteristics of taxes, including that they are forced charges levied by the state for public purposes. Governments have the right to collect taxes based on two theories: the necessity theory, which is that governments need funds to provide services; and the lifeblood doctrine, which is that taxes are essential for a government's survival. Taxes are considered the reciprocal duty of citizens in exchange for the benefits of protection, security, and a civilized society provided by the government.

Uploaded by

Kisha Alyana Colindres
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

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.

ESSENTIAL CHARACTERISTICS OF TAX

a. A tax is a forced charge, imposition or contribution


b. It is a pecuniary burden payable by money
c. It is imposed for public purpose
d. It is imposed pursuant to a legislative authority
e. It is levied within the territorial and legal jurisdiction of a state
f. It is assessed in accordance with some reasonable rule of apportionment

Theory of Taxation

1. Necessity Theory – The existence of government is a necessity. The government cannot continue to perform of serving
and protecting the people without means to pay its expenses. For this reason, the state has the right to compel all its
citizens and property within its limits to contribute
2. Lifeblood Doctrine – Taxes are the lifeblood of the government without which it can either exist nor endure,

MANIFESTATION OF THE LIFEBLOOD THEORY:

 No Estoppel against the Government.


 Collection of taxes cannot be enjoined (stopped by injunction)
 Taxes could not be the subject of compensation or set-off
 A valid tax may result in the destruction of the taxpayer’s property.
 Right to select objects (subjects) of taxation.

Basis of Taxation:

Benefits-Protection Theory

The basis of taxation is the reciprocal duties of “protection and support” between the state and its inhabitants. The state collection
taxes from the subject of taxation in order that it may be able to perform the functions of the government. The citizens, on the
other hand, pay taxes in order that they may be secured in the enjoyment of the benefits of organized society. This theory
spawned the Doctrine of Symbiotic Relationship which means, taxes are what we pay for a civilized society.

DISTINCTIONS AMONG THE THREE (3) INHERENT POWERS OF THE STATE

Taxation Police Power Eminent Domain


NATURE Power to enforce Power to make and Powe to take private
contributions to raise implement laws for the property for public use with
government funds general welfare just compensation
AUTHORITY Government only
PURPOSE For the support of the
government
PERSONS AFFECTED Community or a class of
individuals. Applies to all
persons, property and excises
that may be subject thereto
TYPE OF PROPERTY Property is wholesome and is
devoted to public use or
purpose
EFFECT Contribution becomes part of
public fund
RIGHT AFFECTED Property right
SCOPE Plenary, comprehensive.
Supreme
BENEFITS RECEIVED In form of protection and
benefits received from
government
AMOUNT OF No limit
IMPOSITION

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