Define taxation.
Enumerate and explain the inherent powers of the
State.
- The process and means of the sovereign
through its law-making body (legislature) to
impose burdens upon the people/ subjects
within their jurisdiction for the purpose of
raising revenues to carry out government
projects.
- As a state power- inherent power of the
state to enforce proportionate
contributions for public purpose
- As a process - act of levying
(collecting/demanding) of tax; raises
income to defray (provide money) for the
necessary expenses of the government
- As a mode of cost distribution – burden to
those subjects but is also benefited from
Distinguish the three powers of the State and
this, (since taxes are used by the govt for
enumerate their similarities.
public purpose)
Distinguish the theory and the basis of taxation
- Theory of taxation; a necessary burden.
Since the government offers a wide array of
services to its subjects, and the society
cannot function soundly without the help of
the government (the govt is indispensable,
an absolute necessity in a society). Hence,
Describe the scope of the power of taxation.
the theory of taxation is for the sole
purpose of the government’s funding in
order for them to exist.
- Basis of taxation is about the mutual
support between the govt and its subjects.
Wherein the state collects taxes in order to
perform their duties, while its subjects pays
taxes to enjoy and benefit from living in an
organized society.
Discuss the Lifeblood doctrine.
- The government will not exist without
taxation, hence it is the lifeblood of the
govt.
- The government cannot continue to
perform its functions in serving its people
without the means to pay for its expenses.
- 1. Taxation power – power of the state to
enforce contributions from its subjects to
sustain itself. To defray necessary expenses
of the govt. (national gov’t lang ang may
inherent power, local gov’t wala, must
abide with the constitution)
- 2. Police power – to provide for safety and
to legislate for the protection, health,
welfare, and morals of the community
- 3. Eminent power – power of the sovereign
state to take public property for public
purpose without just compensation (paying
for the owner of the property)
- All are necessary attributes of the
sovereignty
- All inherent to state
- Legislative in nature
- All ways in which the state interferes to
rights and properties
-
- Most absolute power of the govt,
- Broadest scope of all powers
- Regarded as:
o Comprehensive – wide scope of
coverage (persons, business
activities, professions, rights and
privileges)
o Plenary – unlimited area of
application, and only restricted by
inherent/constitutional limitation
o Unlimited – highest degree,
unlimited in the absences of law
o Supreme – selection of the subject
of taxation
Which institutions are exempt from real property
tax in the Constitution?
- Religious, charitable, educational
institutions are exempt as long as non-
profit. (Used actually, directly, and
exclusively).
Explain the stages of the exercise of taxation
power.
1. Levying or imposition of the tax – act of the
legislative body to choose the persons,
properties, rights/privileges to be subjected
to taxation.
2. Assessment and collection – act of
executing the law through the
administrative body of the govt.
3. Payment of the tax – act of the taxpayer
settling his tax obligations; response of
people
Explain the concept of situs.
- literally the place of taxation.
- has the jurisdiction to impose a particular
tax
- general rule: can’t go beyond its jurisdiction
(territorial limits)
- basic rule: the state where the subject to be
taxed has a situs to rightfully levy/collect tax
Example:
1. Business tax – depends on where the
place of the business is done
(transactions that took place)
2. Income tax – all residents and domestic
corps. are subject to tax within/without
the Ph. Alien/foreign only taxable if
sourced from the Ph
3. Property tax – if the property is in PH,
taxable
4. Personal tax – if you stay in the PH,
regardless if resident ka, taxable pa rin.
Distinguish the Marshall doctrine from the Holme’s
doctrine
- Marshall doctrine says taxation is the power
to destroy, because it can be used as an
instrument of police power. Destroy in a
means to discourage/prohibit wrong
activities/occupations. Unless it is for raising
revenues.
- Holme’s doctrine say taxation is power to
build, not destroy while the court sits. Build
as means to encourage activities/industries
that may benefit the grant of tax incentives.
Explain double taxation, its elements and its types.
- Taxing twice by the same:
1. Authority
2. Same property/subject matter
3. Purpose
4. Jurisdiction
5. Taxing period
6. Kind of/character of tax
2 types:
1. Direct double taxation – all elements exist
for both impositions, legally objectionable
for being oppressive because it violates
equal protection, uniformity, and
equitableness
2. Indirect double taxation – not prohibited by
the constitution, something not favored,
should be avoided and prevented.
What are the categories of escapes from taxation?
grant of tax immunity to a particular class of
persons or property. Can be through the
constitution, law, or contract. Can be revoked only
if granted by law
a. Result to loss of government revenue
1. Tax evasion – illegally reducing or
outright not paying taxes, punishable by
law
2. Tax avoidance – tries to minimize only
or totally escape taxes, in any
permissible means (shows legit tax
deductions, etc.), not punishable by law
3. Tax exemption – privilege, freedom
from a financial burden.
 b. Do not result to loss of government 8. Exemption of religious or charitable entities,
1. Shifting- process of transeferring tax non-profit cemeteries, churches and mosque from
burden to other taxpayers. (Forward property taxes
and backward. onward)
9. Non-appropriation of proceeds of taxation for
2. Capitalization - when the tax rate of a
the use, benefit, or support of any church, sector
company increases/decreases, the value
system of religion
of an asset in the company also moves
(negative relation) 10. Exemption from taxes of the revenues and
3. Transformation – assets of non-stock, non-profit educational
manufacturer/producer pays tax and institutions
strives to recover such expense to lower
Income tax is a type of tax that governments
production costs impose on income generated by businesses and
individuals within their jurisdiction
Distinguish tax amnesty from tax condonation.
- Tax amnesty is the absolute forgiveness
given by the government to not impose any
penalties to persons guilty of
evasion/violation of tax law. This is to give a
second chance for tax evaders, including
criminal acts.
- Tax condonation, forgiveness under
justifiable grounds.
Inherent limitations
1. Limitation of territorial jurisdiction
2. International comity
3. Purpose must be public in nature
4. Exemption of government entities,
agencies and instrumentalities
5. Prohibition against delegation of the
taxing power

Constitutional limitations
1. Due process of law
2. Equal protection of laws
3. Rule of uniformity in taxation
4. Progressive system of taxation
5. Non-imprisonment for non-payment of poll tax
6. Non-impairment of obligation of contracts
7. Free-worship rule