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Chapter 1 Introduction To Taxation
Chapter 1 Introduction To Taxation
INTRODUCTION TO TAXATION
3 Inherent Power of the State
4. They are all ways in which the state interferes with private rights and properties
2. Income Tax Situs on Services: Services fees are subject to tax where
they are rendered.
3. Income Tax Situs on Sale of Goods: The gain on sale is subject to tax
in place of sale.
a. Local Taxes.
Non-assignment of Taxes - Tax obligation
cannot be assigned or transferred to another
entity by contract.
Contracts executed by the tax payer to such
effect shall not prejudice the right of the
government to collect
Imprescriptibility in Taxation – Prescription of
the lapsing of a right due to passage of time.
When one sleep on his right over an
unreasonable period of time, he is presumed to
be waiving his right.
The Government’s right to collect taxes does
not prescribe unless the law itself provides for
such prescription.
Doctrine of estoppel – Under the doctrine of estoppel, any
mispresentation made by one party toward another who relied
therein in good faith will be held true and binding against that
person who made the mispresentation.
The doctrine of estoppel. The basic concept of an estoppel is
that where a person (A) has caused another (B) to act on the
basis of a particular state of affairs, A is prevented from going
back on the words or conduct which led B to act on that basis, if
certain conditions are satisfied.
- The Government is not subject to estoppel. An
error to any government employee does not
binds the government.
- It is held that the neglect or omission of
government official entrusted with the
collection of taxes should not be allowed to
bring harm or detriment to the interest of
people
Judicial Non-interference- Generally courts are
not allowed to issue injunction against the
Government pursuit to collect tax as this would
unnecessarily defer tax collection.
This rule is anchored on the Lifeblood Doctrine.
Strict Construction of Tax Laws – When the law
clearly provides for taxation, taxation is the
general rule unless there is a clear exemption.
Hence the maxim, “Taxation is the rule,
exemption is the exception”
- When the language of the law is clear and
categorical, there is no room for interpretation.
- There is only room for application. However,
when taxation laws are vague, the doctrine of
strict legal construction is observed.
Vague Tax Laws- vague tax law is construed against
the government and in favor for the taxpayer. A Vague
Tax Law means no tax law. Obligation arising from law
not presumed