PDF San Beda College of Law MEMORY AID I PDF

1/28/2017 San Beda College of Law MEMORY AID IN TAXATION LAW TAXATION LAW COMMITTEE TAXATION LAW I.
GENERAL PRINCIPLES POWER OF …
San Beda College of Law MEMORY AID
PDF IN TAXATION LAW TAXATION LAW
COMMITTEE TAXATION LAW I.
GENERAL PRINCIPLES POWER OF
San Beda College of Law TAXATION
MEMORY AID IN TAXATION
LAW TAXATION LAW
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Abugwapo Bragito
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San Beda College of Law MEMORY AID IN TAXATION LAW TAXATION LAW COMMITTEE …  D O W N LO A D
San eda College of Law 1
MEMORY AID IN TAXATION LAW
TAXATION LAW
6. levied for a public purpose.

I. GENERAL PRINCIPLES
R EQUISITES OF A VALID TAX
POWER OF TAXATION 1. should be for a public purpose
TAXATION – power by which the 2. the rule of taxation shall be uniform
sovereign through its law-making body 3. that either the person or property
taxed be within the jurisdiction of
raises revenue to defray the necessary READ PAPER
expenses of government from among
those who in some measure are 4. the 
thattaxing authority and collection
the assessment
of certain kinds of taxes guarantees
privileged to enjoy its benefits and must
against injustice to individuals,
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1/28/2017 San Beda College of Law MEMORY AID IN TAXATION LAW TAXATION LAW COMMITTEE TAXATION LAW I. GENERAL PRINCIPLES POWER OF …
privileged to enjoy its benefits and must
bear its burdens. against injustice to individuals,
especially by way of notice and
Two Fold Nature of the Power of opportunity for hearing be provided
Taxation 5. the tax must not impinge on the
1. It is an inherent attribute of inherent and Constitutional
sovereignty limitations on the power of taxation
2. It is legislative in character
THEORIES AND BASES OF TAXATION
Extent of Taxing Power 1. Lifeblood Theory
Subject to constitutional and Taxes are what we pay for civilized
inherent restrictions, the power of society. Without taxes, the government
taxation is regarded as comprehensive, would be paralyzed for lack of the
unlimited, plenary and supreme. motive power to activate and operate it.
Hence, despite the natural reluctance to
SCOPE OF LEGISLATIVE TAXING POWER surrender part of one's hard-earned
1. Amount or rate of tax income to the taxing authorities, every
2. Apportionment of the tax person who is able to must contribute
3. Kind of tax his share in the running of the
4. Method of collection government. (CIR v. Algue, Inc.)
5. Purpose/s of its levy, provided it is
for public purpose 2. Necessity Theory
6. Subject to be taxed, provided it is The power to tax is an attribute of
within its jurisdiction sovereignty emanating from necessity. It
7. Situs of taxation is a necessary burden to preserve the
State's sovereignty and a means to give
TAXES – enforced proportional the citizenry an army to resist an
contributions from the persons and aggression, a navy to defend its shores
property levied by the law-making body from invasion, a corps of civil servants to
serve, public improvements designed for
of support
in the State
of by virtue of its
government andsovereignty
for public the enjoyment of the citizenry and those
needs. which come within the State's territory,
and facilities and protection which a
CHARACTERISTICS OF TAXES government is supposed to provide.
1. forced charge; (Phil. Guaranty Co., Inc. v. CIR)
2. pecuniary burden payable in money;
3. levied by the legislature; 3. Benefits-Protection / Reciprocity
4. assessed with some reasonable rule Theory
of apportionment; (see theoretical Taxation is described as a symbiotic
justice) relationship whereby in exchange of the
5. imposed by the State within its benefits and protection that the citizens
jurisdiction; get from the Government, taxes are
paid. (CIR v. Algue, Inc.)
TAXATION LAW COMMITTEE

CHAIRPERSON: Charmaine Torres ASST. CHAIRPERSON: Rhohail Castro EDP: Rachelle Saya SUBJECT HEADS: Jemina Sy, Casiano Ilagan,
Jr., Ryan Co, Edwin Torres :MEMBERS: Marita Lourdes Azur, Edizer Enriquez, Christian Cabrera, Jhundee
Guillermo
Note: While taxes are intended for persons, property or other privileges to
general benefits, special benefits to be taxed.
taxpayers are not required. The The court‘s power in taxation is
Government renders no special or limited only to the application and
commensurate benefit to any particular interpretation of the law.
person or property.
Note: The principle of judicial non-
IS THE POWER TO TAX THE POWER TO interference extends to the
San Beda College of Law MEMORY AID IN TAXATION LAW TAXATION LAW COMMITTEE …
DESTROY? administrative realm.  D O W N LO A D
1. “Power to tax is the power to
destroy” (Marshall Dictum) – refers to ASPECTS OF TAXATION
the unlimitedness and the degree or 1. Levy or imposition of the tax (tax
vigor with which the taxing power may legislation)
be employed to raise revenue. 2. Enforcement or tax administration
- the financial needs of the State may (tax administration)
outrun any human calculation, so the
power to meet those needs by taxation BASIC PRINCIPLES OF A SOUND TAX SYSTEM
must not be limited even though taxes (K EY: FAT)
become burdensome or confiscatory. 1. Fiscal Adequacy – sufficiency to
meet government expenditures and
2. “Power to tax is not the power to other public needs.
destroy while the Supreme Court sits” 2. Administrative Feasibility/
(Holmes Dictum) – the power to tax Convenience – capability of being
knows no limit except those expressly effectively enforced.
stated in the Constitution. 3. Theoretical Justice – based on the
taxpayer‘s ability to pay; must be
Marshall and Holmes Dictum Reconciled progressive. (Ability to Pay Theory)
Although the power to tax is almost
unlimited, it must not be exercised in an POLICE EMINENT
TAXATION
arbitrary manner. If the abuse is so POWER DOMAIN
great so as to destroy the natural and 1. Purpose
fundamental rights of people, it is the To raise To promote To facilitate
duty of the judiciary to hold such an act revenue public the State‘s
purpose need of
unconstitutional.
through property for
regulations public use
PURPOSES AND OBJECTIVES OF TAXATION 2. Amount of Exaction
1. Revenue – basically, the purpose of No limit Limited to No exaction;
taxation is to provide funds or the cost of but private
property with which the State regulation, property is
promotes the general welfare and issuance of taken by the
the license or State for
protection of its citizens.
surveillance public
2. Non-Revenue (Key: PR 2EP) purpose
a. Promotion of general welfare
b. R egulation
c. R eduction of social inequality
d. Encourage economic growth
3. Benefits Received
e. Protectionism
No special No direct A direct
or direct benefit is benefit
POWER OF JUDICIAL R EVIEW IN TAXATION benefit is received; a results in the
As long as the legislature, in received by healthy form of just
imposing a tax, does not violate the economic compensation
applicable constitutional limitations or taxpayer; standard of to the
merely society is property
restrictions, it is not within the province
general attained owner
of the courts to inquire into the wisdom benefit of
or policy of the exaction, the motives protection
behind it, the amount to be raised or the

CHAIRPERSON: Charmaine Torres  ASST. CHAIRPERSON: Rhohail Castro EDP: Rachelle Saya  SUBJECT HEADS: Jemina Sy, Casiano Ilagan,
Jr., Ryan Co, Edwin Torres :MEMBERS: Marita Lourdes Azur, Edizer Enriquez, Christian Cabrera, Jhundee
Guillermo
4. Non-impairment of Contracts registration fees are regulatory

Contracts Contracts Contracts may exactions and not revenue measures.
may not be may be be impaired
impaired impaired
b. The tax imposed on videogram
5. Transfer of Property Rights establishments is not only regulatory but
Taxes paid No transfer Transfer is a revenue measure because the earnings
become part but only effected in
of public restraint in favor of the
of such establishments have not been
funds its exercise State subject to tax depriving the government
of an additional source of income. (Tio
6. Scope
All persons, All persons, Only upon a
v. Videogram Regulatory Board, 151
property and property, particular SCRA 208)
excises rights and property
privileges c. The ―coconut levy funds‖ were
all raised under the state‘s taxing and
SYSTEMS OF TAXATION police powers.
Global System Schedular System The state‘s concern to make it a
A system A system employed strong and of

livelihood secure source not segment
the significant only in the
of
employed where where the income tax the population, but also of export
the tax system treatment varies and earnings, the sustained growth of which
views is made to depend on
is one of the imperatives of the
indifferently the the kind or category
tax base and of taxable income of
economic growth.‖ Philippine Coconut
generally treats in the taxpayer. Producers Federation, Inc. Cocofed v.
common all Presidential Commission on Good
San Beda College of Law MEMORY AID IN TAXATION LAW TAXATION LAW COMMITTEE …
categories of Government (178 SCRA 236, 252)  D O W N LO A D
taxable income of
the individual. CONSTRUCTION OF TAX LAWS
A system which A system which 1. Public purpose is always presumed.
taxes all itemizes the different 2. If the law is clear, apply the law in
categories of incomes and provides accordance to its plain and simple
income except for varied percentages
tenor.
certain passive of taxes, to be
incomes and applied thereto. 3. A statute will not be construed as
capital gains. It imposing a tax unless it does so
prescribes a clearly, expressly and
unitary but unambiguously.
progressive rate 4. In case of doubt, it is construed most
for the taxable strongly against the Government,
aggregate incomes and liberally in favor of the
and flat rates for taxpayer.
certain passive
5. Provisions of a taxing act are not to
incomes derived
by individuals. be extended by implication.
6. Tax laws operate prospectively
EXAMPLES OF TAXES LEVIED WITH A unless the purpose of the legislature
R EGULATORY PURPOSE, OR COMBINED to give retrospective effect is
R EGULATORY PURPOSE, OR COMBINED to give retrospective effect is
EXERCISE OF POLICE POWER AND THE POWER expressly declared or may be
OF TAXATION. implied from the language used.
7. Tax laws are special laws and
prevail over a general law.
a. Motor vehicle registration fees
are now considered revenue or tax
NATURE OF T AX L AWS
measures.(Pal v. Edu, G.R No. L-41383,
August 15,1988) 1. Not political in character
This case reversed the doctrine 2. Civil in nature, not subject to ex
previously held in Republic v. Philippine post facto law prohibitions
Rabbit Bus Lines, Inc., 32 SCRA 211, to 3. Not penal in character
the effect that motor vehicle

CHAIRPERSON: Charmaine Torres  ASST. CHAIRPERSON: Rhohail Castro EDP: Rachelle Saya  SUBJECT HEADS: Jemina Sy, Casiano Ilagan,
Jr., Ryan Co, Edwin Torres :MEMBERS: Marita Lourdes Azur, Edizer Enriquez, Christian Cabrera, Jhundee
Guillermo
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1/28/2017 San Beda College of Law MEMORY AID IN TAXATION LAW TAXATION LAW COMMITTEE TAXATION LAW I.

MEMORY AID IN TAXATION LAW

6. levied for a public purpose.

TAXATION LAW COMMITTEE

San eda College of Law 2

MEMORY AID IN TAXATION LAW

TAXATION LAW COMMITTEE

San eda College of Law 3

MEMORY AID IN TAXATION LAW

4. Non-impairment of Contracts registration fees are regulatory

A system A system employed strong and of

TAXATION LAW COMMITTEE

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