A.

Definition
Tax Special Assessments
a. Taxation → Elements: ESS
i. Enforced proportional contribution from persons and properties
Imposed on persons / property / privilege Imposed on lands
ii. Imposed by State ℅ sovereignty
iii. Levied for support of government Imposed regardless of public improvement Imposed to benefit the one who paid [benefit
B. Nature & Characteristics land by increasing its value]
a. Lifeblood theory → taxes are the lifeblood of the State, without it the
government won’t be able to operate To support the government To contribute to public improvement
i. But State must still exercise power to tax with reason & proper
procedure Regular exaction Exceptional as to time & locality (not always
b. No-estoppel rule → State is not estopped from collecting taxes if it were imposed)
prevented to do so by fault of its agents
Imposed based on necessity Imposed for benefits
i. Exception: If State does not question timeliness of defense of
taxpayer (if prescribed action na and the state did not rebut)
c. Tax exemptions are strictly construed against the taxpayer c. Tax v. Toll Fees
d. Necessity theory → government cannot operate without taxes to pay for
Tax Toll Fees
expenses
e. Benefits received principle → taxes are what we pay for a civilized society
Imposed by State Imposed by Private entities
f. Symbiotic relationship doctrine → taxpayer & government have reciprocal
obligations To raise revenue To offset cost of construction & maintenance
C. Attributes of Sound Tax System: FAT
a. Fiscal adequacy → sources of revenue must meet government expenses
b. Administrative feasibility → effective administration with least inconvenience E. Impact and Incidence of Taxation
to taxpayer Impact Incidence
c. Theoretical justice → fair to average taxpayer, based on ability to pay
D. Tax v. Other Exactions Point where tax is originally imposed → Whom the tax burden finally rests. This may
a. Tax v. License Fees Statutory taxpayer be shifted.

Look At Tax License Fee

Direct Tax Indirect Tax (ex. VAT)
Power coming from From tax power From police power
Exacted from very person who should pay Paid by one person in the expectation that he
Purpose To raise revenue To regulate them. Incidence & burden is imposed on 1 can shift the burden to someone else →
person. Incidence is imposed on 1 person
Why imposed Object are persons / Object is the right to exercise → Tax burden shifted to another, not the
property / privilege a privilege liability

Amount No limit to amount Must be necessary to carry

out regulation F. Subject Matter

Personal Tax Property Tax Excise Tax

Tax Base
Community tax certificate Real property tax ℅ LGC On exercise of profession or
Timing If regulated already + New imposition
enjoyment of privilege
imposed another (fait
accompli)
G. Rates of Tax
b. Tax v. Special Assessments Progressive Regressive

 
 h. Prohibition against taxation of real property of Charitable Institutions,
Increases as capacity to pay
Churches, Parsonages, Mosques, and Non-Profit Cemeteries [their actual,
increases
direct, and exclusive use]
i. Prohibition against taxation of non-stock, non-profit education institutions
H. Scope [their revenues & assets used directly, actually, and exclusively]
Local National j. Majority of congress vote for Tax Exemption including Tax Amnesty
k. Prohibition on Use of tax for special purpose → abandonment of use - give
℅ LGC ℅ NIRC it to general fund
l. Tax Bills from HOR
m. President’s veto power on Appropriation, Revenue, and Tariff Bills - May
I. Hh
item-veto
Ad Valorem Specific n. Judicial power to review legality of tax
o. Grant of power to LGU to create own sources of revenue
Based on value Quantitative threshold
L. Double Taxation
J. Inherent Limitations in Power of Taxation ​[P,L,G,C,J] Direct Double Taxation (x) Indirect Double Taxation
a. Must be for ​public purpose​ [Philplanters, Pascual]
b. Power to tax is inherently ​legislative​ [Pepsi Cola] - Same property - Same subject matter
i. Delegable to: - Same taxing authority - Different taxing authority
1. President → tariff rates - Same purpose
- Same jurisdiction
2. Local governments
- Same taxing period
3. Administrative authorities - Same kind of tax
c. Government entities / agencies / instrumentalities generally ​exempt​ [MIAA]
i. No point for them to tax each other
d. International ​comity​ [31st Infantry] M. Forms of Escape from Taxation
i. Minimize harshness of international double taxation a. Willful blindness doctrine → taxpayer can no longer raise defense that
e. Limited to State’s ​territorial​ jurisdiction [CIR v. Marubeni] errors on tax returns are not their responsibility (ex. It’s the CPA’s fault)
i. Except when privity of relationship exists between State & i. No need to show intent to defraud in tax evasion
taxpayer ii. What has to be shown is awareness of responsibility to pay
ii. State can tax a transaction if substantial parts are done in the Tax Avoidance Tax Evasion (x)
Philippines
iii. This is an offshoot of “benefits received principle” - corollary Saving on taxes thru legal means - End to be achieved (pay less)
benefit from paying taxes - Bad faith
1. If firm is not doing business here, do not tax me here - Unlawful course of action
iv. Close cousin of international comity
1. International comity → treaty or mere obligation N. Exemption from Taxation
2. Territoriality → subject of taxation based on local laws a. Tax exemption → freedom from burden to which other persons are
K. Constitutional Limitations on Taxation Power subjected + waived of government’s right to collect
a. Due process b. Claimant must point to a specific law creating such right
b. Equal protection c. Tax refunds are tax exemptions
c. Religious freedom d. Tax exclusions​ are strictly construed against the taxpayer
d. Non-impairment e. Tax statutes​ are strictly construed against the government
e. Prohibition against imprisonment for non-payment of poll tax f. For indirect taxes → the statutory taxpayer shall be the one asking for a
f. Uniformity and equality of taxation and progressive system of taxation refund
g. Delegated authority to President to impose Tariff rates i. Except when law grants the the burdened party the exemption
O. Other Doctrines
 
a. Tax laws are prospective
b. Tax rulings (modifying rulings) are non-retroactive if they will be prejudicial
to the taxpayer. Except:
i. Taxpayer deliberately misstates facts
ii. New facts gathered by BIR are materially different
iii. Taxpayer in bad faith
c. Set-off taxes → No set-off of taxes against government claims because
taxes are not contracts
d. Taxpayer’s suit requisites:
i. Public funds are disbursed by government and a law is violated or
there is irregularity
ii. Petitioner is directly affected