Chapter 1 – General Principles of Taxation

Three inherent powers of the government

1. Eminent Domain – The power of the state or those to whom the power has been
delegated to take private property for public use upon paying to the owner a just
compensation.
2. Police Power – The power of the state to enact such laws in relation to persons and
property as may promote public health, public morals, public safety and general welfare
of the people.
3. Taxation – The power by which the sovereign, thru its legislature, raises revenue to
support the necessary expenditures of the government.
Double Taxation
In its strict sense (Direct duplicate or direct double taxation) it means taxing twice for
the same purpose, by the same taxing authority, in the same jurisdiction, in the same period,
some property in the territory.
In its broad sense (indirect duplicate or indirect double taxation) which is taxation other
than direct duplicate, it extends to all cases in which there is a burden of two or more pecuniary
impositions.
However, double taxation may give rise to certain defense that would render the tax
void, such as:
1. The two taxes which are of the same kind, nature, and form the same taxing authority
make taxation inequitable, excessive, oppressive, and unreasonable.
2. Uniformity in taxation is violated as when the first measure applies to all the members
of a certain class, while the second measure applies only to limited members of the
same class.
a. Income tax, donor’s tax, estate tax
Revenue
It refers to all funds or income derived by the government, whether from tax or any
other source.
It may be derived from the following sources:
1. Grants received from another government
2. Donations from non-governmental sources
3. Loans from private entities or another government entity
4. Commercial revenues such as those received by government-owned or
controlled enterprises
5. Administrative revenues such as fines, penalties, and forfeitures
6. Taxes such as internal revenues and custom duties