3 Inherent Powers of a State:

1) Power to Tax
2) Police Power
3) Power of Eminent Domain

The Power to Tax

Subject to inherent and constitutional limitations, the power of taxation is regarded as supreme,
plenary, unlimited, and comprehensive.1 As long as the legislature, in imposing a tax, does not
violate applicable constitutional limitations or restrictions, the courts have no concern with the
wisdom or policy of the exaction, the political or other collateral motives behind it, the amount to be
raised, or the persons, property, or other privileges to be taxed. 2
Police Power
Police power is the inherent power of a sovereign state to legislate for the protection of the health,
general welfare, safety, and morals of the public. It involves the power to regulate both liberty and
property for the promotion of the public good.
Note: The police power of the State may be exercised through taxation because taxes may be levied
for the promotion of the welfare of the public. 3
Power of Eminent Domain
The power of eminent domain is the inherent power of a sovereign state to take private property for
a public purpose. The Constitution limits the exercise of this power by providing that: “Private
property shall not be taken for public use without just compensation.” 4 Taxation covers three (3)
separate areas or aspects of government activity, namely:
1. Levying or imposition of the tax. This involves the passage of tax laws which is generally a
legislative act. In the Philippines, the taxing power is exercised by Congress.

2. Assessment. The process of determining the correct amount of tax due.

3. Collection and payment – the act of compliance with the tax law by the taxpayer.

Executive or administrative in nature. Done by the Bureau of Internal Revenue (“BIR”)