C.

LIMITATIONS OF
THE POWER OF
TAXATION
 Limitations classified

The power to impose taxes is not without limitations and these

limitations may be classified into:

Constitutional- Those expressly found in the Constitution or

implied from its provision
Inherent- Those which restrict the power although they are not
embodied in the constitution.
 Enumeration of the limitation
(1) CONSTITUTIONAL
a. Due process of law
b. Equal protection of the law
c. Rule of uniformity and equity in taxation
d. No imprisonment of non payment of poll tax
e. Non impairment of the obligation of contracts
f. Non infringement of religious freedom
g. No appropriation for religious purpose
h. Exemption of religious, charitable and educational entities,
non profit cemeteries and churches from taxation.
i. Exemption of non stock, non profit of educational
institution from taxation
j. Concurrence by a majority of all the Members of
Congress by the passage of a law granting tax
exemption.
k. Authority of the President to veto the particular
item or items in a revenue or tariff bill
l. Non-impairment of the jurisdiction of the Supreme
Court in the tax cases.
(2) INHERENT
a. Requirement that levy must before a public purpose (also
implied from the Constitution)
b. non-delegation of the legislative power to tax (also implied
from the Constitution)
c. exemption from the taxation of government entities
d. international comity
e. territorial jurisdiction
 Requirement of due process of
law
“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 law.”

Any deprivation of life, liberty, or property is with due

process if it is done:
a. Under the authority of the constitution itself or of a
law that is valid
b. After compliance with reasonable methods of
procedure prescribed.
 Applied to taxation-
1. A taxpayer may not be deprived of his property for non-
payment of taxes without giving notice to him, as required
by law, of his tax liability as well as of the sale at public
auction of such property to satisfy the taxes as this will
amount to a denial of due process
2. A tax which is imposed for a private purpose or which
beyond the jurisdiction of the government to levy and
collect, likewise offends due process of law.
 Requirement of equal protection

Equal protection of the laws signifies that “ all persons subject to

legislation shall be treated alike under like circumstances and
conditions both in the privileges conferred and liabilities
impose.”
 Thus, there is no violation of the
protections:
1. Where those with different incomes are made to pay
different rates for taxes

2. Where foreign corporations are made to pay higher

amount of taxes than that paid domestic corporation

3. Where stables for race horses are taxed while stables for
non-race horses are not.