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 The power of the state to collect

revenues for public purposes only.


The inherent power of the state,
acting through the legislature:
to impose and collect revenues
to support the government and its
recognized objects.
 It is anchored on the benefits-received
principle (Villegas and Abiola), its burden
must be shouldered by those who enjoy
the government ‘s benefits and services.
 It must be noted that not all people can
afford to pay taxes.
 Taxes must be based on an individual’s
ability to pay taxes.

( A government cannot function without the


necessary funds.)
 Enforced Contribution
 The National Internal Revenue Code of the
Philippines (Republic Act 8284)
 All the citizens, with respect to their ability, have to
pay taxes.
 A tax cannot be imposed as a voluntary contribution
or donation.
 Payable in Money
 A tax must be discharged alone in money in which
must be in legal tender.
 Proportionate in Character
 Taxes are based on the ability to pay.
 Imposed on Persons or Property
A tax may be imposed on acts, transactions, or
contracts.
 A person will pay taxes for his income and
owned estates.
 Imposed by the State which has Jurisdiction over
the Person or Property
 The state cannot apply its power of taxation to
individuals or entities outside its legal jurisdiction.
 Imposed by the Law-making Body of the State
 Its
imposition must be anchored on the
enactment of statutes and ordinances made by
the Legislative branch of the government.
 It is Levied for Public Purposes
 Taxationinvolves and a tax constitutes, a charge
or burden to provide income for public
purposes:
 The support of the government.
 The administration of the law.
 The payment by public expense.
 As to who bears the burden
 Direct Taxes
- these are paid and shouldered directly by the
taxpayers.
-include personal income taxes and estate
taxes.
 Indirect Taxes
-paid by the taxpayer but which he can shift or
pass on to others particularly who avail of his
goods and services.
 As to Subject Matter or Object
 Personal, Poll or Capitalization Tax
- A tax of fixed amount imposed on individual
residing within a specified territory, whether a
citizen or not, and regardless of property or the
occupation they engaged in such as
community tax.
 Property Tax
-refers to the amount imposed on property,
whether real or personal, in proportion either to
its value or in accordance with some other
reasonable method or appointment.
 Excise Tax
-it is charged or imposed upon the
performance of an act, the enjoyment of a
privilege and in engaging an occupation.
 As to Purpose
 General, Fiscal, or Revenue Tax
-imposed for the general purpose of the
government to raise funds for its needs.
-examples are income tax and almost taxes.
 Special or Regulatory Tax
-imposed for a special purpose to achieve some
social or economic ends, irrespective of
whether revenue is actually raised or not.
-examples are protective tariffs or customs
duties on import goods to protect local
industries.
 As to Determination of Account
 Specific Tax
-refers to the fixed amount imposed by the
head or number, or by some standard or weight
or measurement which requires assessment
other than a listing or classification of the
subjects to be taxed.
 Ad Valorem Tax
-is a fixed proportion of the value of the property
with respect to which the tax is assessed.
-requires the intervention of assessors or
appraisers to estimate and determine the
amount due from each taxpayer.
-examples are real estate tax, percentage tax,
and excise tax on cigars and cigarettes.
 As to Scope or Authority Imposing Tax
 NationalTax
-imposed by the national government.
-examples are national revenues and customs
duties.
 Municipal or Local Tax
-imposed by municipal or public corporations.
-example is real estate tax.
 As to Graduation or Rate
 Proportional Tax
-based on fixed percentage of the amount of
the property, Income or other basis to be taxed.
-examples are real property tax and all
percentage taxes.
 Progressive or Graduated Tax
-refers to the rate which increases the tax
base or bracket increases.
-examples are income tax, estate tax,
and donor’s tax.
 Regressive Tax
-refers to the rate which decreases as the
tax base or bracket increases.
 National Taxes
-those implied by the National Government
under the National Internal Revenue Code
and other laws particularly the Tariff and
Customs Code.
 Local Taxes
-those imposed by local governments to
meet particular needs under the Local
Government Code, such as real property
tax and the community tax(formerly
residence tax)
 Income Tax
- a tax on a person’s income, emoluments,
profits and the like realized in one taxable
year.
 Estate Tax
-a tax on the right of the deceased person
to transmit his/her estate to his/her lawful
heirs and beneficiaries at the time of death
and on certain transfers, which are made
by law as equivalent to testamentary
disposition.
- it is not a tax property and a tax
imposed on the privilege of
transmitting property upon the death
of the owner.
- is based on the laws in force at the
time of death notwithstanding the
postponement of the actual
possession or enjoyment of the estate
by the beneficiary.
 EQUITY
-must be based on ability to pay.
 CERTAINTY
-the amount to be paid and the manner
for payment must be certain.
 CONVENIENCE
-the time for payment and the manner of
collection must not be oppressive.
 ECONOMY
-the tax to be levied must be just enough
to sustain the government and its function.
 Levy or Imposition- involves the impact of
taxation, free to select the persons or
properties or the business, interest, or privileges
that may be subjected to imposition or
burdens, as long as the legislative body does
not violate constitutional restrictions or
limitations.
 Assessment and Collection- the basic
guidelines on the assessment are laid down
and the administrative authorities are
responsible for the details in the collection of
taxes .
 Payment- referred to as the incidence of
taxation

PURPOSE OF TAXATION
 To raise revenue or provide funds to promote the
general welfare and protection of its citizens.
 To enable the government to finance its multifarious
activities.
 To satisfy the following objectives:
• Equitably distribute the wealth of the nation, referring to
the case of estate and donor’s taxes
• Protect new industries in which the rate of taxation may
be increased to regulate the proliferation of
unnecessary industries and competition with foreign
investments.
• Uplift social conditions as in the case of regulatory
taxes in the exercise of police powers.

BASIS OF TAXATION
-based on reciprocal duties of protection
and support between the state and its
inhabitants. In return for his contribution,
the taxpayer receives benefits and
protection from the government.
- termed as the “benefits received
principle”
 Fiscal Adequacy- the sources of revenue
must be adequate or enough to defray the
expenses of the government.
 Theoretical Justice- taxes must be based
on the ability to pay.
 Administrative Feasibility- must meet the
following criteria:
a. Tax laws must be clear and concise
b. It is capable of proper enforcement
c. It is not burdensome