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INHERENT POWERS OF
THE STATE
POLICE POWER

EMINENT DOMAIN POWER

TAXATION POWER
POLICE POWER
- the power to protect citizens and
provide for safety and welfare of
society

Ex.

- Preservation of natural resources

- Imprisonment of convicted criminals
- Regulation of various professions
EMINENT DOMAIN POWER

- the power to take private property

(with just compensation) for public
use
 TAXATION POWER
- It is a power, process and means

(power to demand contributions for public

purposes to support the government) - POWER
(passes a legislative undertaking thru the
enactment of tax laws by the Congress which will
be implemented by the Executive branch of
government thru its Bureau of Internal Revenue to
raise revenue from the inhabitants) - PROCESS

(a way of collecting and apportioning the cost of

government among those who are privileged to
enjoy its benefits) - MEANS
 Distinctions
Eminent
Taxation Police Power
Domain
As to concept Power to enforce Power to make and Power to take
contribution to raise implement laws for private property for
government funds the general welfare public use with just
compensation
As to purpose Money is taken to Property is taken or Private property is
support the destroyed to taken for public use
government promote general
welfare
As to person Operates on a Operates on a Operates on the
affected community or a community or a particular private
class of individual class of individual property of an
individual
As to importance Inseparable for the Protection, safety Common
existence of a and welfare of necessities and
nation – it supports society interest of the
police power and community
eminent domain transcend
individual rights in
property
NATURE OF TAXATION POWER
- Inherent power of the State

- Essentially a legislative function

- For public purposes

- Territorial in operation

- Tax Exemption of government

- Strongest among the inherent powers of

the government
 IMPORTANCE OF TAXATION
- Essential for the existence of the government
and of the nation

- Primary source of government revenue that is

used to effectively and permanently perform
government functions

- Without taxation, the other inherent powers

(police and eminent domain powers) would be
paralyzed.
PURPOSES OF TAXATION

- Revenue Purpose

- Regulatory Purpose

- Compensatory Purpose
OBJECTS OF TAXATION
- Refer to the subject to which taxes are
imposed

1. Persons (natural, juridical)

2. Properties (tangible-real/personal,
intangible-rights, patents etc.)

3. Excise objects (transaction, privilege

(estate tax – death/donation-donor’s tax),
interest)
1. What is Tax Avoidance?
Give example/s.
2. What is Tax Evasion?
Give example/s.
3. Among the two, which is
legal? Which is not?
Explain.
 STAGES OF TAXATION
1. Levy/Imposition
• Passage of tax laws/tax policy (nature,
subjects, objective, rate & base of tax, & the
manner of imposing and collecting tax)

2. Assessment
• Act of administration and implementation of
tax laws
• Self-assessing

3. Payment of Tax “Tax Collection”

• Compliance by taxpayer
Principles of a Sound Tax System
1. Fiscal Adequacy
– Should be sufficient to meet the demand of
public expenditures

2. Equality or Theoretical Justice

– Must be proportionate to the taxpayer’s
ability to pay

3. Administrative Feasibility
– Must be convenient, just, uniform and
effective in their administration – free from
confusion and uncertainty
Forms of Escape from Taxation
1. Tax Evasion
– uses unlawful means to defeat, evade or
lessen the payment of tax

2. Tax Avoidance
– Reducing or totally escaping payment of
taxes through legally permissible means
 Situs of Taxation
- Defines the boundaries of taxing power over the
objects of taxation in terms of territorial jurisdiction

FACTORS:

1. Nature, kind or classification of the tax being

imposed
2. Subject matter of the tax
3. Source of the income being taxed
4. Place
5. Citizenship
6. Residence
 Essential Characteristics of Tax
1. Enforced contribution
2. Imposed by the legislative body
3. Proportionate in character
4. Payable in the form of money
5. Imposed for the purpose of raising revenue
6. Used for a public purpose
7. Enforced on some persons, properties, or
rights
8. Commonly required to be paid at regular
intervals
9. Imposed by the state within its jurisdiction
 CLASSIFICATIONS OF TAXES
1. As to purpose
2. As to Object
3. As to Who Bears the Burden
- Direct
- Indirect
4. As to Scope or Authority Collecting the Tax
- National
- Local
 OTHER CHARGES/FEES
1. Penalty
2. Debt
3. Toll
4. License Fee
5. Custom duties
6. Tariff
TAX ADMINISTRATION
- A system of collecting taxes in accordance
with the country’s tax policies.
- ASSESSMENT and COLLECTION

DEPARTMENT OF FINANCE (DOF)

- Principally responsible for the fiscal policies
and general management of the Philippine
Government’s financial resources
 OTHER AGENCIES
1. Bureau of Internal Revenue (BIR)
2. Bureau of Customs (BC) and Tariff
Commission (TC)
3. Land Transportation Office (LTO)
4. Duly and Lawfully Authorized Collectors
5. Local Offices
 BUREAU OF INTERNAL REVENUE
1. The Commissioner of the Internal Revenue
2. Deputy Commissioners of Internal Revenue
3. Revenue Regional Director
4. Revenue District Officer
5. Revenue Examiners & Officers
6. Division Chiefs of the BIR
7. BIR Collection Agents