Module 2 – TAXES

A. Definition

B. Essential Characteristics of Taxes

1. Imposed by the State

2. Levied by the law-making body of the State

3. Enforced contribution

4. Payable in money

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

5. Proportionate in character 6. Levied on persons property and excise (privilege)

7. Levied for public purpose

8. Paid at regular periods or intervals

9. Personal to the taxpayer

Tan v. Del Rosario, G.R. No.109289, October 3, 1994

Commissioner of Internal Revenue v. Santos, GR 119252, Aug. 18,1997

C. Requisites of a valid tax

1. Taxable subject must be within the jurisdiction of the taxing authority

2.Taxable subject must be accorded due process in the assessment and collection of taxes

3. Imposition be for public purpose

4. Rule of taxation be uniform

5. Must not violate inherent and constitutional limitations

D. Classification of Taxes

I. As to subject matter

a. Personal, poll or capitation

b. Property

c. Excise

II. As to who bears the burden and incidence

a. Direct

b. Indirect

Tolentino v. Secretary of Finance, G.R. No. 115455, October 30, 1995)

III. As to purpose

a. General, fiscal or revenue

b. Special, regulatory or sumptuary

IV. As to how amount is determined

a. Specific

b. Ad Valorem (Value)

V. As to taxing authority

a. National

b. Local

VI. As to rate

a. Progressive

b. Regressive

c. Proportionate

E. Taxes distinguished from other Impositions

1. Debts

Caltex v. Commission on Audit supra

Francia v Intermediate Appellate Court, G.R. No. 67649, June 28, 1988

Republic v. Mambulao Lumber Company, G.R. No. 17725, February 28, 1962

Domingo v Carlitos, G.R. No.L-18994, June 29, 1963

2. License Fees

Victorias Milling Co., Inc. v. Municipality of Victorias, Negros Occidental, L-24813, September 27, 1968

3. Special Assessments/Levies

4. Tolls

5. Penalties

National Development Company vs. Commissioner of Internal Revenue, G.R. No. 53961 June 30, 1987

6. Custom Duties