GENERAL PRINCIPLES OF TAXATION

3 Powers of the state

1> Police Power

2> Power of Eminent Domain/Expropriation
3> Power of Taxation
Police power to promote:

Public safety
Public Welfare
Public Morals
Public Health
Power of Eminent Domain

Taking of private property for public purpose with just

compensation.
Power of Taxation
Process or means by which the lawmaking body raises
income in order to defray the necessary expenses of
the government.
Purposes of taxation
• Primary purpose
Raise revenue

• Secondary purpose
To reduce inequality in wealth
To prevent inflation from increasing
To protect local industries against foreign competition
To strengthen anemic enterprises
Limitations of the power to tax
• Constitutional limitations

• Inherent limitations
Scope of taxation
• Unlimited
• Comprehensive
• Plenary
• Supreme
Theory and Basis of Taxation
• Theory
Existence of government is a necessity.

• Basis
reciprocal duties of protection and support between
the state and its inhabitants.
Basic Principles of sound tax system
• Fiscal Adequacy

• Equality or Theoretical Justice

• Administrative Feasibility
Nature of the Power to Tax
• Inherent in sovereignty
• Legislative in charater.