General Principles of Taxation

Taxation Defined

Taxation is a mode of raising revenue for public purpose. The

term is ordinarily used to express the exercise of the sovereign
power to raise a revenue for the expense of the government. It
is the act of laying a tax, i.e. the process or means by which the
taxing power is exercised. (1 Cooley on Taxation. 72-73)

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 Theories and bases of
taxation
 A. Lifeblood Theory – it is said that taxes are
what we pay for civilized society..
 B. Necessity Theory – the power to tax is
an attribute of sovereignty emanating
from necessity.
 C. Benefits-Protection Theory – taxation
is described as a symbolic relationship
whereby in exchange of the benefits and
protection that the citizens get from the
Gov’t, taxes are paid.
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Scope or Coverage of Taxation

Taxation covers two separate areas or aspects of government

activity, namely:

1. Levying or imposition of the tax. This is generally a

legislative act. In the Philippines, the taxing power is exercised
by Congress.

2. Collection of the tax. This is essentially executive or

administrative in nature.

The national agency charged with the function of collecting

internal revenue taxes is the Bureau of Internal Revenue.

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 The Power to Tax

The Constitution has vested in Congress the power to tax

(Art.VI, Philippine Constitution)

Congress may make all the laws which shall be necessary

and proper for carrying into execution the foregoing
power.

The power to tax is the one great power upon which the
whole national fabric is based. It is as necessary to the
existence and prosperity of a nation as is the air he
breathes to the natural man. It is not only the power to
destroy, but it is also the power to keep alive

(Nicol v. Ames, 173 U.S. 509)

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 Scopes of legislative
taxing power
 A. Amount or rate of tax
 B. Apportionment of the tax
 C. Kind of tax
 D. Method of collection
 E. Purpose/s of its levy, provided it is for public
purpose
 F. Subject to be taxed, provided it is within its
jurisdiction
 G. Situs of taxation

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 Characteristics of taxation

 A. Inherent power of the sovereign state

 B. Exclusively lodged with the legislature

 C. Subject to inherent, constitutional and contractual

limitations

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Limitation on the Power to Tax
The power to tax is subject to three limitations,
namely:

(1) Constitutional limitations

(2) Contractual limitations

(3) Inherent limitations

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 Constitutional Limitations
These are limitations imposed by the Constitution. They are:
(a) No person shall be deprived of life, liberty or property without due process of law,
nor shall any person be denied the equal protection of the laws (Art.III, Sec. 1)

(b) No person shall be imprisoned for debt or nonpayment of a poll tax (Art.III, Sec.
20)

(c) The rule of taxation shall be uniform and equitable, The congress shall evolve a
progressive system of taxation (Art. VI, Sec.28(1)).

(d) Charitable institutions, churches and parsonages or convents appurtenant thereto,

mosques, non-profit cemeteries, and all lands, buildings, and improvements, actually,
directly and exclusively used for religious, charitable, or educational purposes shall be
exempt from taxation.

(e) No law granting any tax exemption shall be passed without the concurrence of a
majority of all the members of the Congress. (Act VI, Sec.28(4)).

(f) No law impairing the obligation of contracts shall be passed (Art.III, Sec. 10).

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 Contractual Limitations
•These are restrictions on the taxing power imposed by
previously existing contracts entered into by the
government with another party who may be another
state or its own citizens.

•When it is unilaterally granted by law, and the same it

withdrawn by virtue of another law

•When the exemption is granted under a franchise – it

may be withdrawn at any time

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 Inherent Limitations
These are restrictions arising from the very nature of the power to tax
itself. They are:

(a)Public purpose of taxes

(b)Non-delagability of the taxing power
(c)Territoriability or Situs of taxation
(d)Tax exemption of the government
(e)International comity

TESTS IN DETERMINING PUBLIC PURPOSE – the ends are public benefit and
welfare

1.Duty Test-whether the thing to be furthered by the appropriation of public

revenue is something which is the duty of the State, as a government, to
provide.
2.Promotion of General Welfare Test-whether the proceeds of the tax will
directly or indirectly promote the welfare of the community in equal
measure.

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 Non delegability of the
taxing power
General Rule- the power of taxation is exclusively
exercised by the legislature. For the power emanates
from, through and by the people. Hence, a delegated
authority could no longer be furthered delegated.
Exceptions to Non delegability:
1. Authority of the President to fix tariff rates, import
and export quotas, tonnage and wharfage dues, and
other duties
2. Power of the local gov’t to levy taxes, fees and
charges

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 Situs of taxation
- The power to tax is limited only to persons, property
or businesses within the jurisdiction or territory of the
taxing power.
FACTORS THAT DETERMINE THE SITUS OF TAXATION
1. Kind or classification of the tax being levied
2. Situs of the thing or property taxed
3. Citizenship of the taxpayer
4. Residence of the taxpayer
5. Source of the income tax
6. Situs of the excise, privelege, business or occupation
being taxed

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 Application of situs of taxation

Kind of Tax Situs

Personal-Community tax Residence of taxpayer
Real Property Tax Location of property
Business Tax Place of business
Transfer Tax Residence or citizenship of the
taxpayer or location of
property

Sales Tax Where the sale is consummated

Income Tax Consider (1) citizenship, (2)

residence and (3) source of
income
Corporate Tax
Law on incorporation

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Non taxability of the government

As a matter of public policy, property of the

state and of its municipal subdivisions devoted to
gov’t uses and purposes is deemed to be exempt
from taxation although no express provision in the
law is made therefore.

RULES GOVERNING TAX IMMUNITY OF THE GOV’T

1. Administrative Agencies-tax exempt unless when the law
expressly provides for tax
2. GOCC’s-income is taxable at the rate imposed upon
corporations engaged in similar business, industry or
activity. Exception: GSIS, SSS, PHIC and PCSO (Sec 27(C),
NIRC) but PAGCOR exemption was lifted by RA 9337

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Non taxability of the government

3. Government Educational Institutions

a. Property or real estate tax-property actually,
directly and exclusively used for educational purposes-
exempt but income of whatever kind and character
from any of their properties, real or personal,
regardless of the disposition, is taxable.
b. Incomes received by them as such are exempt from
taxes. However, their income from any of their
activities conducted for profit regardless of the
disposition is taxable.

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 International comity

These principles limit the authority of the

government to effectively impose taxes on a
sovereign state and its instrumentalities, as
well on its property held and activities
undertaken in that capacity. International
laws dictates peace and harmony among states
hence, no state shall assert superiority over
the other by imposing taxation.

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Basic Principles of a Sound Tax System
1. Fiscal Adequacy - which means that the sources of
revenue should be sufficient to meet the demands of
public expenditures;

2. Equality or Theoretical Justice - which means that the

tax imposed should be proportionate to the taxpayer's
ability
to pay; must be progressive (rate increases as the tax
base increases) and

3. Administrative Feasability - which means that the tax

laws should be capable of convenient, just and effective
administration
(Report of 1st Tax Commission, Vol.1)
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 Distinctions among the three
inherent power of the state

 TAXATION
1. Purpose- to raise revenue
2. Amount of Exaction-no limit
3. Benefits Received-no special or direct benefit received
is received by the taxpayer, merely general benefit of
protection
4. Non impairment of contracts- contracts may not be
impaired
5. Transfer of property rights- taxes paid become part of
public funds
6. Scope-all persons, property and excise

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 POLICE POWER-is the inherent power of the
sovereign state that interferes with private rights to
promote general welfare
1. Purpose-to promote public purpose through regulations
2. Amount of Exaction-limited to the cost of regulation,
issuance of the license or surveillance
3. Benefits Received-no direct benefit is received, a
healthy economic standard of society is attained
4. Non impairment of contracts-contracts may be impaired
5. Transfer of property rights-no transfer but only restraint
in its exercise
6. Scope-all persons, property, rights and privileges
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Distinctions among the three
inherent power of the state
 EMINENT DOMAIN-inherent power of the sovereign
state to take private property upon payment of just
compensation for public use
1. Purpose-to facilitate the State’s need of property for
public use
2. Amount of exaction-no exaction; but private property is
taken by the State for public purposes
3. Benefits Received-a direct benefit results in the form of
just compensation to the property owner
4. Non impairment of contracts-contracts may be impaired
5. Transfer of property rights-transfer is effected in favor
of the State
6. Scope-only upon a particular property

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 Double taxation

Definition:
.... Taxing the same property twice when it should be
taxed but once.

Kinds of Double Taxation:

1. Direct Duplicate Taxation-double taxation in the
objectionable or prohibited sense and constitutes a
violation of substantive due process.

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Elements of Direct Duplicate
Taxation

a. The same property or subject matter is taxed twice

when it should be taxed only once
b. Both taxes are levied for the same purpose
c. Imposed by the same taxing authority
d. Within the same jurisdiction
e. During the same taxing period
f. Covering the same kind or character of tax

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Elements of Direct Duplicate
Taxation

2. Indirect Duplicate Taxation-legal/permissible. The

absence of one or more of the elements of direct
duplicate taxation makes the double taxation indirect.

REMEDIES AGAINST DOUBLE TAXATION

1. Tax sparing rule e.g. Sec 28(B)(5)(b), NIRC
2. Tax deductions e.g. Vanishing deductions
3. Tax credits
4. Exemptions
5. Treaties with other states
6. Principle of reciprocity

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 Forms of escaping taxation

 Shifting-the process by which the tax burden

is transferred from the statutory taxpayer to
another without violating the law
 Capitalization-a mere increase in the value of
the property is not income but merely an
unrealized increase in capital. No income
until after the actual sale or other disposition
of the property in excess of its original cost.
 Tax Avoidance-the exploitation by the
taxpayer of legally permissible alternative tax
rates or methods of assessing taxable property
or income, in order to avoid or reduce tax
liability
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Forms of escaping taxation

 Transformation-the manufacturer or producer upon

whom the tax has been imposed, fearing the loss of his
market if he should add the tax to the price, pays the
tax and endeavors to recoup himself by improving his
process of production, thereby turning out his units at a
lower cost.
 Tax Evasion-the use by the taxpayer of illegal or
fraudulent means to defeat or lessen the payment of
the tax
 Tax Exemption-a grant of immunity to particular
persons from the obligation to pay taxes

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 Kinds of tax exemption

 As to Basis
1. Constitutional-immunities from taxation which
originate from the constitution
2. Statutory-those which emanate from legislation
 As to Form
1. Express-expressly granted by organic or statute law
2. Implied-when particular persons, property or excises
are deemed exempt as they fall outside the scope of
the taxing provision itself

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Kinds of tax exemption

 As to Extent
1. Total-absolute immunity
2. Partial-one where a collection of a part of the tax is
dispensed with
 As to Object
1. Personal-granted directly in favor of certain persons
2. Impersonal-granted directly in favor of a certain
class of property

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 Tax Defined
Tax is the enforced proportional contribution from
persons and property, levied by the State, by virtue of
its sovereignty, for the support of government and for
all public needs (1 Cooley on Taxation)

A tax has been defined as an enforced, proportional,

pecuniary contribution, from persons and property
within the taxing jurisdiction, levied by the State by
virtue of its sovereign power to tax, to raise
revenue for the support of the government and for its
public needs (Taxation Review, Camillo).

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 Purpose of tax
Taxed are the lifeblood of the government. Without
taxes, no government can function. Taxes must be levied
in order to defray the various governmental functions
(Taxation review, Camillo.)

Essential Elements or
Characteristics of a Tax
1. Enforced contribution
2. Exacted pursuant to legislative authority
3. For raising revenue for public needs
4. Proportionate in character or uniform
5. Payable in money

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 Canons of a Tax

1. Proportional to one's ability to pay

2. Certain and not arbitrary

3. Convenient to pay

4. Economical to collect (Taxation Review. Camillo)

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 Classification of Taxes

A. According to scope or exercising authority

1. National tax - tax is levied and
collected by the national government.
Example: Income tax, Estate tax, Donor's
Tax

2. Municipal or local tax - tax is imposed

and collected by local government.
Example: Occupation tax, real estate tax

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 Classification of Taxes
B. According to subject matter or object

1. Personal tax - tax is a fixed amount imposed upon persons, or

upon persons of a certain class, residing within the jurisdiction of
the taxing authority, without regard to their property or
occupation or business in which they may be engaged.
Example: Community tax

2. Property tax - a tax imposed on property, in proportion to its

value or some other reasonable method of appointment.
Example: Real estate tax

3. Excise tax - a tax upon the performance of an act, or the

exercise of a right or privilege,or the engaging in business, practice
of profession or pursuit of occupation.

Example: Value-added tax, donor's tax, income tax, occupation

tax, estate tax
4. Custom Duties-duties charged upon the commodities on their
being imported into or exported from a country

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C. According to who bears the burden of the tax
1. Direct Tax-a tax payable by the person upon whom it is directly imposed
by law.
Example- Income Tax
2. Indirect Tax-the burden of the tax can be legally shifted to or
passed on to others.
Example-VAT, Excise Taxes, Customs Duties

D. According to purpose
1. General or revenue tax - the tax is levied without a specific or pre-
determined purpose. Thus, the revenue collected can be appropriated for
general public purposes.
Example: Income tax, value added tax
2. Special - tax is imposed for a special purpose.

E. According to the rate applied

1. Proportional - the tax is based on a fixed percentage of the property or
amount of income or receipts
Example: Real estate tax, value-added tax
2. Progressive - the tax rate increases as the tax base increases.
Example-Income tax, Donors Tax, Estate Tax

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 3. Regressive- the rate of tax decreases as the
tax base increases. There are no regressive taxes
in the Philippines.

F. According to measurement of the amount due

1. Specific-tax is a fixed amount measured by the
head or number, or by some standard of weight or
measurement, and requires no assessment other
than a listing or classification of the subjects to
be taxed.
Example-Excise taxes on lubricating oils, waxes
and petroleum, leaded premium gasoline and
liquified petroleum gas

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2. Ad Valorem Tax-tax of a fixed proportion of the amount
or value of the property with respect to which the tax is
assessed and requires the intervention of assessors or
appraisers in certain cases.
Example-Real Estate Tax, Excise Taxes on fermented
liquors, cigarettes packed by machine and automobiles

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 Other impositions than taxes

 Toll-amount charged for the cost and maintenance of

the property used.
 Penalty-punishment for the commission of a crime
 Compromise penalty-amount collected in lieu of
criminal prosecution in cases of tax violations
 Special Assessment-levied only on land based wholly on
benefit accruing thereon as a result of improvement or
public works undertaken by government within the
vicinity

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Other impositions than taxes

 License or Fee-regulatory imposition in the exercise of

the police power
 Margin Fee-exaction designed to stabilize the currency
 Debt-a sum of money due upon contract or one which is
evidenced by judgment
 Subsidy-a legislative grant of money in aid of a private
enterprise deemed to promote the public welfare
 Customs Duties and Fees-duties charged upon
commodities on their being transported into or
exported from the country

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Other impositions than taxes

 Revenue-a broad term that includes taxes and income

from other sources as well
 Impost-in its general sense, it signifies any tax, tribute
or duty. In its limited sense, it means a duty on
imported goods and merchandise
 Tithe-imposes by a church or sect
 Tribute-imposes by a monarch

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 Tax laws

 Definition:
Sets of rules that provide means for the State to raise
revenues burden upon its citizens.
 How to make a tax law?
Generally, all revenue bills (proposal) must originate
from the House of Representatives. After passing 3
readings by a majority vote in technical committee and
deliberation of congress. It shall be elevated to Senate,
which needs to pass the same 3 readings before the
President signs a bill into law for its implementation.

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 Different sources of tax laws

 Republic Act/Statutes/Tax Code

 Presidential Decrees
 Executive Orders
 Court Decisions
 Revenue Regulations (lease source of tax laws)

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Nature or Construction of Tax Laws
1. Tax laws prospective, generally.
Tax laws, like other statues, are to be constructed as having only a prospective operation unless
the purpose and intention of the legislature to give retrospective effect is expressly declared or
is necessarily implied from the language used (Lorenzo v. Posadas, 64Phil.353).
There is a presumption that the legislature intended its amendment to operate only in the
future. And in case of every doubt, the doubt must be resolved against the retrospective
operation (Tan Chiu v. Collector, C.T.A. Case No. 451, Dec. 27, 1958).

2. Tax exemptions to be constructed strictly.

Legal provisions providing for tax exemptions are to be constructed strictly against the grant and
liberally in favor of the taxing power
Exemption from taxation are highly disfavored in law and he who claims an exemption must be
able to justify his claim by the clearest grant organic or statue law

3. Revenue laws are not political in nature.

Our internal revenue laws are not political in nature and as such were continued in force during
the period of enemy occupation and in effect were actually enforced by the occupation
government

4. Tax laws are civil and not penal in nature although there are penalties provided for their
violation.

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 Major classifications of tax
laws

 TAX IMPOSITION
One that provides a burden

 TAX EXEMPTION
One that provides immunity

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 Rules in constructing tax
imposing laws
 Public purpose is always presumed
 Legislative intention must be considered
 Where the language is plain and there is no doubt tax
laws must be given their ordinary meaning
 A statute will not be construed as imposing a tax unless
it does so clearly and expressly
 In case of doubt, it is construed most strongly against
the Gov’t, and liberally in favor of the taxpayer

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Rules in constructing tax
imposing laws
 Provisions of a taxing act are not to be extended
by implication
 Tax laws operate prospectively unless the purpose
of the legislature to give retrospective effect is
expressly declared or may be implied from the
language used
 Tax laws are special laws and prevail over general
law
 Tax laws are civil in nature, not political
 Neither are tax laws penal in nature.
 Neither can the Constitutional prohibition against
passage of laws be invoked in taxation
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Different principles governing
tax exemptions
 Exemptions from taxation are highly disfavored in law and
are not presumed
 He who claims as exemption must be able to justify his
claim by the clearest grant of organic or statute law by
words too plain to be mistaken.
 He who claims exemption should prove by convincing proof
that he is exempted
 Taxation is the rule, tax exemption is the exceptions
 Tax exemption must be strictly construed against the
taxpayer
 Tax exemptions are not presumed
 Constitutional grants of tax exemption are self-executing
 Tax exemptions are personal

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 Tax revenue regulations
 These are interpretations of an administrative body (BIR)
intended to clarify or explain the tax laws and carry into
effect its general provisions by providing the details of
administration and procedure. They are deemed necessary
to the proper enforcement and execution of tax laws.
REQUISITES OF TAX REGULATIONS
 It must be reasonable
 Within the authority conferred
 Not contrary to law
 Must be published
 Prospective, unless it is beneficial to the taxpayer, which
may be given retroactive application
NOTE: It is provided that the Secretary Of Finance upon the
recommendation of the Commissioner of Internal Revenue shall
promulgate all needed rules and regulations of the tax code.
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 BIR rulings
 BIR issues a general interpretation of tax
laws usually upon a request of a taxpayer
to clarify a provision of law

ADMINISTRATIVE INTERPRETATIONS
These interpretations are given great
weight but are not laws
JUDICIAL INTERPRETATIONS
These are court’s decisions which are
considered part of the law of the land

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 Tax and Licensed Fee Distinguished
1. The purpose of a tax is the revenue that is to be
derived therefrom for the support of the
government. Whereas, the purpose of a license is to
regulate certain act, business, industries, or or
professions which, unless regulated, may become
harmful to the public.

2. Taxation is an exercise of the power of taxation

and, therefore subject to these limitations on the
power to tax. Licensing is an exercise of the police
power to guard and safeguard the interest and
welfare of the public. It is not subject to the three
limitations on taxation.
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Tax and Licensed Fee Distinguished

3. Tax- amount is unlimited

Licensed Fee-amount is limited to the cost
of issuing the license and inspection and
surveillance
4. Tax- non-payment does not make the
business illegal but maybe a ground for
criminal prosecution
Licensed Fee-non payment makes the
business illegal

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 Assessment Defined
It is the process by which persons subject to taxation
are listed, their property described, and its value
ascertained and stated.

Assessment is merely a notice to the effect that the

amount therein stated is due as tax and a demand for
the payment thereof. It is a step preliminary, but
essential to warrant of distraint and levy, if still
feasible, and also to establish a cause for judicial
action.

Assessment fixes and determines the tax liability of

taxpayer. As soon as it is served, an obligation arises
on the part of the taxpayer concerned to pay the
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amount assessed and demanded.
 Special Assessment Defined

A special assessment is in the nature of a tax upon

property levied according to benefits conferred in the
property. The whole theory of a special assessment is
based on the doctrine that the property against which
it is levied derives some special benefit from the
improvement xxx their property being increased in
value by the expenditure to an amount at least equal
to the sum they are required to pay.

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Tax and Special Assessment Distinguished
1. A special assessment can be levied only on land;
2. A special assessment cannot (at least in most states)
be made a personal liability of the person assessed;
3. A special assessment is based wholly on benefits; and
4. A special assessment is exceptional both as to time and
locality.
The imposition of a charge on all property, real and
personal, in a prescribed area, is a tax and not an
assessment, although the purpose is to make a local
improvement on a street or highway. A charge imposed
only on property owners benefited is a special assessment
rather than a tax notwithstanding the statue calls it a
tax. If property is exempt from real property tax, it is
also exempt from special assessment.
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 Distinctions between tax
and debt
TAX
An obligation imposed by law
Due to the gov’t in its sovereign
capacity
Payable in money
Does not draw interest except in
case of delinquency
Not assignable
Non payment is punished by
imprisonment except in poll
tax
Imposed only by public authority
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DEBT
Created by contract
May be due to the gov’t but in its
corporate capacity
Payable in money, property or
sevices
Draws interest if stipulated or
delayed
Assignable
No imprisonment in case of non
payment (Art III Sec 20 of
Constitution)
Can be imposed by private individual
 Meaning of Uniformity of Taxation
Uniformity means that the same class of
persons or properties falling under the same
circumstances should be taxed the same kind and
rate tax.

Meaning of Equality of Taxation

The rule of equality required no more than that
the same means and methods be applied impartially to
all the constituents of each class, so that the law shall
operate equally and uniformly upon all persons in similar
circumstances.
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 Other doctrines in taxation

 Taxpayer’s Suit
This suit can only be allowed if the act involves a direct
and illegal disbursement of public funds derived from
taxation
 Equitable Recoupment
This states that a claim for refund which is prevented by
prescription may be allowed to be used as payment of
unsettled tax liabilities if both taxes arise from the same
transaction in which overpayment is made and
underpayment is due
 Tax Amnesty
This is an immunity from all criminal and civil obligations
arising from non payment of taxes. It is a general pardon
given to all taxpayers; it applies only to past periods.

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Taxes Imposed under National Internal
Revenue Code
1. Income Tax

2. Estate Tax

3. Donor's Tax

4. Value-added Tax

5. Other percentage taxes

6. Excise taxes

7. Documentary stamp taxes

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 Tax administration

It is a system involving assessment,

collection, and enforcement of taxes,
including the execution of judgement
in all tax cases decided in favor of the
BIR by the courts.

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Different agencies involved in
tax administration
 Bureau of Internal Revenue-national taxes
Agents of the BIR:
1. Commissioner of Customs with respect to taxes on
imported goods
2. Head of the appropriate gov’t office with respect to
energy tax
3. Banks duly accredited by the CIR
 Bureau of Customs-customs law enforcement
(international taxes)
 Provincial, city and municipal assessors and treasurers-
local and real property taxes (local taxes)
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 Organization and function of the
BIR

BIR is under the supervision and control

of the Dep’t of Finance (Sec 2, NIRC) under the
office of the President.
Who compose the BIR?
 One Commisioner
 Four Deputy Commissioners
 Regional Revenue Director
 Revenue District Officer
 Revenue Officer

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Power and Duties of the Bureau of Internal
Revenue
The powers and duties of the Bureau of Internal Revenue shall
comprehend:

1.The assessment and collection of all national internal revenue

taxes, fees and charges;

2. The enforcement of all forfeitures, penalties and fines

connected therewith;

3. The execution of judgements in all cases decided in its favor

by the Court of Tax Appeals and the ordinary courts;

4. Shall give effect to and administer the supervisory and police

power conferred to it by the Tax Code or other laws.
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 Powers and duties of the BIR
commissioner
 Power to interpret tax law and decide tax cases
1. Interpret provisions of this Code and other tax
laws subject to review of the Secretary of Finance
2. Decide cases
a. Disputed assessments
b. Refunds of internal revenue taxes, fees and
charges
c. Penalties impose in relation thereto
d. Other matters arising from this Code or other
laws or portions thereof administered by the BIR
subject to the exclusive appellate jurisdiction of
the CTA

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 Powers and duties of the BIR
commissioner
 Power to obtain information, summon, examine, and take
testimony of persons
1. The Commissioner is authorized:
a. To examine any relevant book, paper, record or
other data
b. To obtain any information (costs, volume of
production, receipts, sales, gross income, etc) on a
regular basis from
c. To summon (sub phoena duces decum)
d. To take the testimony of the person concerned
under oath as may be relevant to the inquiry
e. To cause revenue officers and employees to make
a canvass of any revenue district or region
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 Powers and duties of the BIR
commissioner
 Power to make assessments, prescribe additional
requirements for tax administration and enforcement
1. Examination of returns and determination of tax due
2. Terminate taxable period
3. Prescribe real property value
4. Authority to inquire into bank deposit
5. Notwithstanding RA 1405 (Bank Secrecy Law) the
Commissioner is authorized to inquire into the bank deposits of:
a. A decedent to determine his gross estate
b. A taxpayer who has filed an application to compromise
payment of tax liability by reason of financial incapacity
6. Authority to register tax agents
7. Authority to prescribe additional requirements

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 Powers and duties of the BIR
commissioner
 Authority to delegate power
1. The Commissioner may delegate the powers vested in
him to subordinate officials with rank equivalent to
Division Chief or higher, subject to limitations/restrictions
imposed under the rules and regulations
EXCEPT: The following powers should not be delegated
1. Power to recommend the promulgation of rules and
regulations by the Sec of Finance
2. Power to issue rulings of first impressions or to reverse,
revoke, modify any existing rule of the BIR
3. Power to compromise or abate any tax liability
4. Power to assign or reassign internal revenue officers to
establishments where articles subject to excise tax are
kept
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 Powers and duties of the BIR
commissioner
 Other Powers
1. Duty to ensure the provision and distribution of forms,
receipts, certificates, and the acknowledgement of
payment of taxes
2. Authority to administer oaths and to take testimony
3. Authority to make arrests and seizures
4. Authority to employ, assign or reassign internal revenue
officers involved in excise tax functions to establishments
where articles subject to excise tax are produced or kept
5. Authority to assign or reassign internal revenue officers
and employees of the BIR to other or special duties
connected with the enforcement or administration of the
revenue laws
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