Principles Of Taxation

Mr. Clieford Perez, CPA, MBM

Inherent Powers of the State
Inherent Powers of the State

Three inherent powers of a state:

▪ 1. Power of taxation
▪ 2. Power of Eminent Domain – it refers to the inherent power of a
sovereign state to take private property for public use upon
payment of a just compensation.
▪ 3. Police Power – it refers to the inherent power of a sovereign
state to enact laws to promote public health, public safety, public
morals and the common good.

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SIMILARITIES

▪ 1. They are indispensable to government existence.

▪ 2. They can exist independent of the constitution.
▪ 3. They are means by which the state interferes with private
rights and properties.
▪ 4. They are generally exercised by the legislature.
▪ 5. They contemplate an equivalent compensation or benefit.

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 Point of Taxation Police Power Eminent Domain
Distinction
Exercising Government Government Government or private
Authority entities

Purpose Revenue and Property is taken Property is taken for

support of the for public use public use
government

Persons affected Community or class Community or class Owner of the property

of individuals of individuals
Amount of Unlimited Sufficient to cover No imposition, the
Imposition the costs of owner is paid the fair
regulation market value of his
property

Relationship Inferior to the “Non Superior to the Superior and may

with the Impairment Clause” “Non Impairment override the “Non-
of the Constitution Clause” of the Impairment Clause” of
Constitution
Constitution the Constitution

Limitation Constitution and Public purpose Public purpose and

Inherent Limitations just compensation

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TAXATION
Taxation defined

 Taxation refers to the inherent power of a sovereign state

acting through its legislature to impose a proportionate
burden upon persons, property, rights or transaction to raise
revenue to support government expenditure and as a tool for
promoting the common good for the people.

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Taxation defined

 Under American Jurisprudence, the power to tax is

considered inherent in a sovereign state because it is a
necessary attribute of sovereignty. Without this power no
sovereign State can exist or endure.

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Simple Exercises
True or False
1. Police power regulates both liberty and property.
2. The three fundamental powers of the state may
be exercise only by the government.
3. Eminent domain may be exercise even by public
service corporation and public entities.

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First Topic is partially
completed.
Thank you!