PART 1

The Inherent Powers of the State

0 Inherent power means a power existing as a natural or basic part of every'
sovereign State, without being conferred or granted by the people or the
Constitution.

THE 3 INHERENT POWERS OF THE STATE:

1. POWER TO TAX
The act of levying or imposinga tax.
It is the process or means by which the sovereign (independent State)
through its law-making body (legislative branch of the government) raises
income to defray the necessary expenses of the government by apportioning
the cost among those who, in some measure, are privileged to enjoy its
benefits, and therefore, must bear its burdens.
The power of Taxation is the power to impose burdens on subjects and
objects (person, property and excises/privileges) within its jurisdiction.

2. POLICE POWER - it is the power of the state to promote public welfare by

restraining and regulating the use of liberty and property. It may be exercised
only by the government. The property taken in the exercise of this power is
destroyed because it is noxious or intended for a noxious purpose.

3. EMINENT DOMAIN - it is the power to take private property for public purpose
upon payment of just compensation.

SIMILARITIES among Taxation, Eminent Domain and Police Power

a. They are inherent in the State.
b. They exist independentlyof the constitutionalthough the conditions for
their exercise may be prescribed by the constitution.
c. Ways by which the State Interfere with private rights and property.
d. Legislative in nature and character.
e. Presuppose an equivalent compensation received, directly or indirectly,
by the persons affected.

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Purposes of Taxation
1. Primary Purpose —To raise revenues/funds to defray the
the government (also necessary expenses of
called Revenue or Fiscal Purpose).

2. Secondary Purpose:
a. Regulatory Purpose - Taxation is
employed as a devise for regulation or
contro/ (to implement the police power
of the State for the promotionof the
general welfare) by means of which
certain effects or conditionsenvisioned
by the government may be achieved.

b. Compensatory Purposes
Reduction of Social Inequality
Economic Growth
Protect local industries against unfair competition

Nature and Characteristics of Taxation

1. Inherent Power — may be exercised although
not expressly granted by the
constitution
2. Essentially a legislative function —only the legislative can impose
taxes
3, Subject to inherent and constitutional limitations —not an absolute power
4. For public purpose
5. The strongest of all the inherent powers of the State.
6. Subject to international treaty or comity
7. Generally payable in money
8. Territorial in scope

In the absence of inherent and constitutional limitations,the power to tax is

comprehensive, plenary, supreme and unlimited. It is so comprehensivethat in the
words of Justice Marshall (was an American lawyer and civil rights activist who served
as Associate Justice of the Supreme Court of the United States), the power to tax
includes the power to destroy.

Taxes Defined
Taxes are enforced proportional contributions from persons and property,levied by the
State by virtue of ie sovereigntyfor the supportof tie governmentand for all iG public
needs.

ESSENTIAL CHARACTERISTICS OF TAX

a. A tax is a forced charge, impositionor contribution
b. It is a pecuniary burden payable in money
c. It is imposed for public purpose
d. It is imposed pursuant to a legislative authoriW
e, It is levied within the territorial and legal jurisdiction of a state
• accordance with some reasonable rule of apportionment
It is assessed tn

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 Theory and Basis of Taxation
I. Necessity Theory —The power of taxation proceeds upon the theory that the existence
of government is a necessity. It is a power predicated upon necessity [Phil Guarantee
Co., Inc. v. Commissioner (13 SCRA 775)]. The government cannot continue to
perform of serving and protecting its 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.
can
2. Lifeblood Doctrine - Taxes are the lifeblood of the government without which it
the people
neither exist nor endure. Upon taxation depends the State's ability to serve
for whose benefits taxes are collected.

MANIFESTATION OF THE LIFEBLOOD DOCTRINE/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
duties of
3. The Benefi&-ProtectionTheory - The basis of taxation is the reciprocal
State collects
"protection and support" between the State and its inhabitants. The
able to perform the
taxes from the subjects of taxation in order that it may be
in order that they
functions of government. The citizens, on the other hand, pay taxes
society. This theory
may be secured in the enjoymentof the benefitsof organized are what we pay
spawned the Doctrine of Symbiotic Relationshipwhich means, taxes
for a civilized society.

STATE
DISTINCTIONS AMONG THE THREE (3) INHERENT POWERS OF THE
Police Power Eminent Domain
NATURE Power to enforce contributions Power to make and implement Power to take private property for
laws for the general welfare. public use with just compensation.
to raise gov't funds.

Govemment only May be granted to public

AUTHORITY Govemmentohly
service/utilitycompanies
For the support of the Promotion of general welfare The taking of private property for
PURPOSE public use.
govemment through regulation

Community or a class of On an individual as the owner of

PERSONS Community or a class of
individuals. personal property.
AFFECTED individuals.
property is
Applies to all persons, property Only particular
Applies to all persons, property
and excises that may be subject comprehended.
and excises that may be
thereto.
subject thereto

TYPE OF Property is wholesomeand is Property is noxious or intended Property is wholesome and is

PROPERTY devoted to public use or for a noxious purpose and as devoted to public use or purpose.
purpose. such taken and destroyed.

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 rutcz
Taxation Police Power Eminent Domain
EFFECT Contribubon becomes part of No transfer or title. There may There is a transfer-of ttle to
public fund a restrainton the property.
irqurous use of property

RIGHTS Property right Property öght and liberty

AFFECTED Properti rght

SCOPE Plenary, comprehenwe, Broader Gereral Merely a power to take

supreme
pa•er b make ard *rpiement property for pubGc pdvate
use.

BENEFITS In form of protedion and

No frect and irnrreffate bereft Market value of propeny
RECEIVED benefits received frorn taken.
but onyy sud as may arse from
the maintenance of a healthy
economic standard of society.
AMOUNTOF No limit Suffcient to cover cost of be No imposition.The owner
IMPOSITION is paid
%cense and the necessary equivalent to the fair value
of his
expenses of pobce surveillance property.
and utatjon.

Similarities among the three Inherent Powers

1. They are inherent in the State.
2. They exist independently of tie constitution although the conditions for
their exercise
may be prescribed by the constitution.
3. They constitute the three methods by which the State interfere with private rights
and
property.
4. Legislative in nature and character.
5. Presuppose an equivalent compensation received, directly or indirectly, by the persons
affected.

Scope of the Taxing Power of the Legislative

The Supreme Court held that the power of taxation is the most absoluteof all
powers of the government. It has the broadest scope of all the powers of the government
because in the absence of limitations, it is considered as comprehensive, unlimited,plenary
and supreme (130 SCRA 654). The matters within tre competenceof the legislature
include the determination of the following:

1. The subject or object (person, property and excises/privileges) to be taxed

2. The purpose of the tax as long as it is a public purpose
3. The amount or rate of the tax
4. Kind of tax
5. Apportionment of the tax (i.e., whether the tax shall be general or limited to a
particular locality or partly general and partly Ixal)
6. Situs of taxabon
7. The manner or method of collection

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Stages/ Aspects of Taxation

Aspects refer to "stages or phases" that are includedor embodiedin the term
"taxation", such as:

1. Levying or Imposition. This process involves the passage of tax laws or ordinances (in
the case of local government units) through the legislature.

2. Assessment and Co//ectjon. This process involves the act of administrationand

implementationof tax laws by the executive through its administrativeagencies such
as the Bureau of Internal Revenue and the Bureau of Customs.

Assessment refers to the determinationby the executive branch (i.e., BIR, BOC,
LGU) of the correct amount of the tax.

Collection of the tax levied, which is essentially administrative in character.

Principles of Sound Tax System

such as the ability
Basically, a sound tax system should satisfy all the principles of taxation,
should not hamper
to generate sufficient revenues, fulfill the socio-economic objectives and
of sound tax system below).
the productive system of the economy (Refer to the elements

ELEMENTS OF SOUND TAX SYSTEM

be sufficient to meet
1. Fiscal Adequacy- The sources of government revenue must
government expenditures and other public needs.
the taxpayer's ability to
2. Theoretical Justice- A good tax system must be based on the
conformably with
pay. This suggests that taxation must be progressiveprogressive system of
constitutional mandate that congress shall evolve a
taxation.
convenient, just •and
3. Administrative Feasibility - Tax laws must be capable of
uncertainty. Thus, the tax
effective administration- free from confusion and
flexibility and diversity.
system should have the meriG of simplicity,

LIMITATIONS ON THE TAXING POWER

A. Inherent Limitations- inherent limitationsproceed from the positive
very nature of the
taxing power itself. The taxing power has very distinct and limitations
some of which inhere in its very nature and exist whether declared or not
declared in the written constitution.

1. Public purpose
Proceeds from tax must be used for:
a. Support of the government.
b. Some of the recognized objects of government.
c. To promote the welfare of the community (not individuals).

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2. Situs of taxation or territoriality - the taxing power of a country is limited to
person and property within and subject to its jurisdiction.

PLACE OF TAXATION

a. The state where the subject to be taxed has a situs may rightfully levy and
collect the tax.

b. The situs is necessarily in the State which has jurisdiction or which exercises
dominion over the subject in question.

FACTORS TO CONSIDER IN DETERMININGSITUS OF TAXATION

a. Subject matter (person, property, or activity)

b. Nature of the tax
c. Citizenship
d. Residence of the taxpayer

APPLICATION OF SITUS OF TAXATION

SUBJECT MATTER SITUS
Persons Residence of the taxpayer
Real Property' Location
Tangible Personal Property Location
Intangible Personal Property Domicile of the owner
Income Residence, citizenship, source of income
Business Place of business
Gratuitous Transfer of Property Residence or citizenship of the
transferor or location of ro

3. International comity or treaty - a State cannot tax another State based on the
principle of Sovereign Equality among States. i.e. tax law passed imposing taxes
on foreign ambassadors is not a valid law.

4. Non-delegabilityof the Taxing power (Enactrnent of Tax Laws) - Power of

taxation is purely legislative, hence the power cannot be delegated either to the
executive or judicial departments. The limitation arises from the doctrine of
separation of powers among the three branches of the government.

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 EXCEPTIONS TO THE RULE AGAINST DELEGATION:

a. Delegation to fre President, subject to some limitationsand restrictions, to

fix within specified limits, tariff rates and tonnage or wharfage duties and
other duties and imposts.

b. Delegation to local governments the power to create its own sources of

by
revenues and to levy taxes, subject to such limitationsas may be provided
law.
process
c. Delegation to administrativeagencies certain aspects of the taxing
that are not legislative such as:
pursuant to
the power to fix value of property for purposes of taxation
fixed rules
the power to assess and collect taxes.

5. Tax Exemptions of the govemment

unless expressly
a. Agencies performinggovernmental functions are tax-exempt
taxed.
tax unless expressly
b. Agencies performingproprietaryfunctions are subject to
exempted.
tax, however, the
c. GOCCs performing proprietaryfunctions are subject to
following are granted exemptions:
Government Service Insurance System (GSIS)
Social Security System (SSS)
Philippine Health Insurance Corporation(PHIC)
Local Water Districts (RA 10026)
(PCSO) is tax-exempt prior to
NOTE: Philippine Charity Sweepstakes Office
January 1, 2018 (effectivity of the TRAIN Law).

Power- the followingprovisions

B. Constitutional Limitations on the Taxingin the Constitution on the taxing power of
may be said to be limitationsprescribed
the govemment.

Observance of due process of law

2. Equal protection of law
3. Uniformity in taxation
4. Progressive scheme of taxation
5. Non-imprisonment for non-payment of poll tax
6. Non-impairment of the obligations of contracts
7. Free-worship clause

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8. Exemption of charitable institutions, churches, parsonages, or convents
appurtenant thereto, mosques, and non-profit cemeteries, and all lands,
buildings and improvements actually, directly and exclusively used for
religious, charitable or educational purposes.

9. Exemption from taxes of the revenues and assets of non-profit, non-stock

educational institutions including grants, endowments, donations or
contributionsfor educational purposes.

10. Non-appropriationof public funds or property for the benefit of any church,
sect or system of religion, etc.

11. No money shall be pad out of the Treasury except in pursuanceof an

appropriation made by law.

12. Concurrenceof a majorityof ALL MEMBERSOF CONGRESSfor the passage

of a law granting tax exemption

13. Non-diversificationof tax collections

14. The President shall have the power to veto any particular item(s) in an
appropriation, revenue or tariff, but the veto shall not affect the item(s) to
which no objection has been made.

15. Non-impairment of the jurisdiction of the Supreme Court to review tax cases

16. Appropriations,revenue or tariff bills shall originate exclusively in the House

of Representativesbut the Senate may propose or concur with amendments.

17. Each local government unit shall exercise the power to create its own
sources of revenue and shall have a just share in the national taxes.

NATIONAL TAXES vs. LOCAL TAXES

NATIONAL LOCAL
AUTHORITY Inherent Power Delegated Power

NATURE Legislative in nature Legislativein nature through

throughenactmentof tax enactment of local
laws by the Congress ordinances by the local
and the Senate. legislative branch

PROCESS 1. Levying=Congress 1. Levying=Legislative

2. Assessment/ branch of the LGU
Collection 2. Assessment/Collection
= BIR & BOC = Treasurer

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National Internal Revenue Taxes under the administration of the BIR:

a. Income Tax
b. Estate and donor's tax
c. Value-added tax
d. Other percentage taxes
e. Excise taxes
f. Documentary stamp taxes

DOUBLE TAXATION
KINDS OF DOUBLETAXATION:

a. Direct Duplicate Taxation.

This is objectionableand prohibitedbecause it violates the constitutional
provision on uniformity and equality. It means:

Taxing twice;
By the same taxing authority;
Within the same jurisdiction or taxing district;
For the same purpose;
In the same year or taxing period; and
Same kind or character of tax

b. Indirect Duplicate Taxation

It is not legally objectionable. It extends to all cases in which there is a
burden of two or more pecuniary imposition but imposed by different taxing
authorities.

SOURCES OF TAX LAWS

a) Constitution

b) Tax Treaties and Conventions with Foreign Countries

c) The "Tax Code" [RA No. 8424 - National Internal Revenue Code, as amended
(i.e., RA 10963-TRAIN Law; RA 11534-CREATE Law), Tariff and Customs code,
and portion of the Local Government Code]

d) Statutes and laws like RA 1125 (an Act Creating the Court of Tax Appeals) and RA
7716 (E-VAT Law)

e) Presidential Decrees and Executive Orders

f) Court Decisions

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 g) Revenue issuances promulgatedby the Departmentof Finance such as Revenue
Regulations (RR) Revenue MemorandumCirculars (RMCs), Revenue Memorandum
Orders (RMOs), BIR Revenue Rulings and those of the Bureau of Customs like
Customs Memorandum Orders

h) Local Tax Ordinances

ORDER OF PRIORITY:
1. Constitution
2. treaties
3. Tax Laws/statues and judicial decisions
4. Revenue issuances (revenue regulations, revenue memorandum' circulars,
revenue memorandum orders, revenue rulings, etc.)

NATURE OF TAX LAWS

Tax laws are civil and not penal in nature, althoughthere are penaltiesprovidedfor their
violation. The purpose of tax laws in imposing penalties for delinquencies is to compelthe
timely payment of taxes or to punish evasion or neglect of duty in respect thereof.

CONSTRUCTION OR INTERPRETATION OF TAX LAWS IN CASE OF DOUBTOR AMBIGUITY

a. Tax statutes are construed strictly against the government and liberally in favor of the
taxpayer. Taxes, being burdens, are not to be presumedbeyondwhat the statute
expressly and clearly declares.
b. Provisions granting tax exemptions are construed strictly against the taxpayer claiming
tax exemption and liberally in favor of the government.

APPLICATION OF TAX LAWS

Tax laws are prospective in operation because the nature and amount of the tax could not
be foreseen and understoodby the taxpayer at the time the transactionswhich the law
seeks to tax was completed.

EXCEPTION:
(i.e. some
While it is not favored, a statute may nevertheless operate retroactively legislative
provisions of CREATE) provided it is expressly declaredor is clearly the
when it would be
intent. But a tax law should not be given retroactive application
harsh and oppressive.

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CLASSIFICATION OF TAXES
a. According to Subject Matter:

Personal, POI/ or Capitation Tax — tax of a fixed amount imposed upon

individual, whether citizens or not, residing within a specified territory
without regard to their property or the occupationin which he may be
engaged (e.g. basic communitytax)

Property Tax — tax imposed on property, whether real or personal, in

proportioneither to its value, or in accordancewith some other reasonable
method of apportionment(e.g. real estate tax)

Excise Tax— any tax which does not fall withinthe classificationof a poll tax
or a property tax. This is a tax on the exercise of certain rights and
privileges (e.g. incometax, estate tax, donor'stax, VAT)

b. According to Who Bears the Burden:

DIRECT TAX (e.g. incometax, estate tax, donor'stax)

Imposed on the person obliged to pay the same and this burden
cannot be shifted or passed on to another.
A tax in which the taxpayer who pays the tax is directly liable
therefor, that is, the burdenof paying the tax falls directly on the
person paying the tax.
Demandedfrom the very personwho, as intended,should pay the
tax which he cannot shift to another

INDIRECTTAX (e.g. VAT and OPT)

Payment is demandedfrom a person who is allowedto transfer the

burden of taxation to another.
A tax paid by a personwho is not directlyliabletherefor,and who
may thereforeshift or pass the tax to another person or entity,
which ultimatelyassumes the tax burden(Macedav. Macaraig,197
SCRA 771).
Is demanded in the first instance form one person with the
expectationthat he can shift the burdento someoneelse, not as a
tax but as part of the purchase price

c. According to Determination of Amount:

Specific Tax— this is a fixed amount based on volume, weight or quantityof
goods as measured by tools, instrumentsor standards. (e.g. excise on
cigars and liquors)

Ad Va/oremTax — this impositionis based on the value of the property

subject to tax. (e.g. VAT, incometax, donor'stax and estate tax)

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d. According to Purpose:

Fisca//Genera//RevenueTax — levied without a specific or pre-determined

purpose. (e.g. income tax, donor's tax and estate tax)

Regulatory/Specia//SumptuaryTax —those intended to achieve some social

or economic goals. (e.g. tariff and certain duties on imports)

e. According to Jurisdiction/Scope or Authority

National Tax—imposed by the NationalGovernment

Local Tax- imposedby municipalcorporations(e.g. real estate tax)

f. According to Graduation or Rate

Proportional/F/atRate Tax—unitaryor single rate. (e.g. VAT, OPT)

Progressive/Graduated Tax —as the tax base grows the tax rate increases.
(e.g. income tax on individuals, estates, trusts, estate tax, donor's tax)
Regressive Tax—the tax rate increases as the tax base decreases.

TAX DISTINGUISHED FROM OTHER CHARGES AND FEES

+ TAX VS. TOLL

TAX
it is a demand of sovereignty
it is one's support for the
government
it is imposedonly by the government
it is based on governmental needs
TOLL
it is a demand of proprietorship
it is a compensationfor the use of
somebody else's property
it maybe imposed by the government or
private individuals
it is determinedby the cost of propertyor
improvement thereon

TAX VS. PENALTY

TAX
it is imposed to raise revenue
it is imposed only by the government
it arises from law
generally, payablein money
PENALTY
it is imposed to regulate conduct through
punishment and suppresion of injurious act
may be imposedby the governmentor by
private individuals
it may arise from law or contract
may be paid in money or in kind

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 TAX VS. ASSESSMENT
TAX SPECIAL ASSESSMENT
levied on business, interests, levied on land
transactions, rights, persons, • cannot be made the personal liabilityof the
properties or privileges
person assessed, because it is the land that
may be made a personal liability of
answers for the liability
the person assessed based wholly on benefits received
based on necessity with no hope of
it is exceptional in application for the
direct or immediate benefit to the recovery of cost and/or maintenance of
taxpayer improvement
is of general application

+ TAX VS. LICENSE FEE

TAX LICENSE FEE
tax is levied in the exercise of the license fee emanate from the police power
taxing power of the state
the purpose of it is to generate the purpose of it is regulatory
revenue limited to the necessary expenses of
generally amount is unlimited regulation and control
imposed on person, property, rights imposed on the exercise of a right or
or transaction privileges
non-payment does not make the non-payment makes the business illegal
business illegal

TAX VS. CUSTOMSDUTIES

TAX CUSTOMDUTIES
imposed on person, property, rights Imposed on imported or exported goods
or transaction it is also a tax
it comprehends more than the term
custom duties

TAX VS. DEBT

TAX DEBT
based on law based on contract
not assignable assignable
payable in money payable in kind or in money
not subject to set-off subject to set-off
non-payment may result to No imprisonment(except when debt arises
imprisonment from crime)
bears interest only if delinquent interest depend upon the stipulationof the
parties

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SUBSIDY
• Refers to a pecuniary aid directly granted.by the government
to an individualor
private commercial enterprise deemed beneficial to the public.
NOT A TAX although tax may have to be imposed to pay
it.

REVENUE

Refers to all the funds or income derived by the government,

whetherfrom tax or
any other source.
Amount collected

INTERNAL REVENUE
Internal Revenue means taxes imposed by the legislatureother than duties
on
imports and exports.

TARIFF
t1ay be used in one of three (3) senses:

1. A book of rates drawn usually in alphabeticalorder containingthe names of

several kinds of merchandise with the corresponding duties to be paid for the
same; or

2. The duties payable on goods importedor exported; or

3. The system or principle of imposing duties on the importation (or

exportation) of goods.

*The term tariff and customs duties are used interchangeablyin the Tariff and
Customs Code.

SYSTEMS OF "INCOME" TAXATION

a. Global System —All items of gross income, deductions are reported in one income
tax return and the applicable tax rate is applied on the tax base.

b. Schedular System — Different types of income are subject to different sets of

graduated or flat income tax rates.

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OTHER DOCTRINES/RULES IN TAXATION
Equitable Recoupment — Claim for refund which is prevented by prescription may be
allowed to be used as payment for unsettled tax liabilities if both taxes arise from the same
transaction in which overpayment is made and underpayment is due.

Set-off taxes- Taxes are not subject to set-off or legal compensation because the
government and the taxpayer are not mutual creditors and debtors of each other.

Taxpayer Suit- This provides that a taxpayer suit can only be allowed if the act involves a
direct and illegal disbursement of public funds derived from taxation.

Taxpayer's suit
A case where the act complainedof directly involvesthe illegal disbursement
of public funds derived from taxation. Taxpayers have locus standito question the
validity of tax measures or illegalexpendituresof publicmoney. In such cases, they are
parties in interest who will be prejudicedor benefitedby the avails of the suit. The
genera/ rule is that not only persons individuallyaffected but also taxpayers have
sufficient interest of preventingthe illegal expendituresof money raised by. taxation.
They may, therefore, question in the proper court the constitutionalityof statutes
requiring the expenditureof public funds. But a taxpayer is not relieved from the
obligation of paying a tax because of his belief that it is being misappropriatedby
certain officials, for otherwise, collectionof taxes would be hamperedand this may
result in the paralyzationof importantgovemmental.functions.

Exemptions from Taxation

It is a grant of immunity, express or implied, to particular persons, or corporations of a

particular class, from a tax upon properti or an excise tax which persons and corporations
generally within the same taxing district, are obliged to pay.

CLASSIFICATION OF EXEMPTION:

a. Express or affirmative— these are express provisions in the Constitution,•statues,

treaties, ordinances, franchises or contracts

b. Implied or exemptionby omission—this occurs when a tax is levied on certain

classes of persons, properties or without mentioning other classes.
Those not mentioned are deemed exempted by omission

INTERPRETATION OF EXEMPTION GRANT

Exemption grants are strictly construed against the person or entity claiming
exemption. One must justify such claim by clear and positive grant.

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ESCAPE FROM TAXATION
1. Evasion or Dodging, the taxpayer uses unlawful means to evade or lessen
of tax. the payment

2. Avoidance, also called tax minimization, it is the reductionor totally

of tax through /ega//ypermissible means. escaping payment

3. Shifting, basically, it is the transfer of tax burden to another. The

impositionof tax is
transferred from the statutory taxpayer to anotherwithoutviolating the law.

Impactis the point at which a tax is originally imposed.

Incidence is the point at which the tax burdenfinally rests or settles down.

THREE (3) KINDS SHIFTING

a. Forward shifting
b. Backward shifting
c. Onward shifting

4. Capitalization, the seller is willing to lower the price of the commodityprovidedthe

taxes will be shouldered by the buyer.

5. Transformation, the manufacturer absorbs the additional taxes imposed by the

government without passing it to the buyers for fear of lost of his/itsmarket.Instead,
he/it increases quantity of production,thereby turning their units of productionat a
lower cost resulting to the transformationof the tax into a gain throUghthe mediumof
production.

6. Exemption, it is an immunity, privilege or freedom from payment charge or

burden to which others are obliged to pay.

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