CHAPTER 1

INHERENT POWERS OF THE STATE

- Command, maintain peace and order, and
survive.
- Constitution does not grant powers, they
merely set limitations.
1. POLICE POWER
o safety and welfare of society
(health, welfare and morals)
o May be exercised through taxation
Restricted by: Due process clause (no one shall
be deprived of life, liberty, property)
i.e. Preservation of natural resources,
segregation of lepers from public,
imprisonment of convicted criminals, and
regulation of professions (PRC)
2. EMINENT DOMAIN POWER
o take private property (national
welfare interest)
o common necessity and interests
of the community transcend
individual rights in property.
Restricted by: Just compensation
3. TAXATION POWER
o Enforce contributions (Supports
other powers)
Objective: Support Services of Government
Fundamental Basis: To provide benefits and
supports to its people.
Taxation Defined:
1. Power
a. Refers to inherent powers
b. Demand contributions to
support the government and
pay its necessary expenses
2. Process
a. Legislative undertaking
Enactment: Legislative branch > Congress
Implementation: Executive branch > BIR
3. Means
a. A way of collecting and
apportioning cost of
government
NATURE OF TAXATION POWER
1. Inherent power of sovereignty;
- Taxation is as old as government and exists
with the four elements of the state: people,
territory, sovereignty, and government.
- The state has the supreme power to
command and enforce obedience from
people in its jurisdiction.
- Only the national government has this
inherent powers and not the local
government. Local government or political
subdivisions may exercise if:
o Expressly authorized by constitution
o Valid delegation by national
legislature. (Like the Local
Government Code of the
Philippines.)
2. Essentially a legislative function;
- Only the Congress may impose/enact laws
and ordinances.
- Non-delegation of legislative power to tax.
o Peculiarly and Exclusively legislative
o May not be exercised by executive
or judicial branch.
- Delegated to LGU? Only the legislative may
exercise.
- Delegated to President? Administrative
discretion only.
- Administrative power (MINISTERIAL AND
ADVISORY) may be delegated.
3. For public purpose;
- Must only be for public purpose or general
welfare.
- Common good of the people or Greater
portion of its population.
4. Territorial in operation;
- Observe Tax Situs
- Effective only within territorial limits except
when:
o Privity of relationship exists
o Tax Principle: Reciprocal Duties
o May still tax citizen outside country
Taxation must observe: International Comity
- Respect laws of other states
- Principle: Sovereign Equality
- Eg: May not tax properties used by
diplomats or heads of states as they
exercise sovereign and diplomatic fuctions.
5. Tax exemption of government;
- State may not be taxed without its consent.
o Applies only to government entities
immediately and directly exercising
governmental functions. (AFP)
o Proprietary fuctions? Subject to tax
unless provided otherwise.
o Governmental Fuctions? Exempt
from tax unless provided otherwise.
6. The strongest among the inherent
powers of the government;
- Other powers may not fuction without
taxation.
7. Subject to constitutional and inherent
limitations




SIMILARITIES AMONG THE THREE POWERES
1. Inherent in Sovereignty
2. They are all necessary: No effective government without them
3. Ways the state interferes with privates rights and property
4. Legislative in nature and character
5. Presuppose equivalent compensation
6. Constitution provisions are just limitations

DIFFERENCES OF THE THREE POWERS.
Taxation Police Power Eminent Domain
Concept Raise funds General Welfare
Take private property for public
use
Scope Plenary, comprehensive,
supreme
Broader: Make and
implement laws
Authority
Exercised only government or political subdivisions
May be granted to public utility or
public service company
Purpose
Support the government
General welfare (Take or
destroy)
Public use
Delegation NO YES
Person
affected
Community or class of individual Specific private property
Benefits Healthy economic
standard
Continuous protection and
organized society
Market value of the property/ use
of it to society
Amount
imposed
UNLIMITED
Cost of regulation, license
other necessary expenses
None.
Importance Supports other powers Welfare of society Public > Private needs
Constitution Inferior to non-
impairment clause
Superior to non-impairment
clause
Superior to and may override
non-impairment clause
Limitations
Subject to
CONSTITUIONAL AND
INHERENT Limitations
1. Relatively Free from
CONSTITUTIONAL
Limitations
2. Due Process
1. Public Purpose
2. Just Compensation



IMPORTANCE OF TAXATION