TAX 01.07 - TAX 01.

08
Dates @September 8, 2022 8:30 AM-11:00 AM

Course TAX

Notes

Status Done

Week Week 1

TAX 01.07
Constitutional Limitations
1. Due Process
right to be heard before rendering of judgement.

Substantive Due Process - the assessment has substance or legal basis (e.i. tax law). The
legal basis must be express, categorical, and unequivocal. If there is no legal basis, the
government cannot collect since there is no taxation by implication.

Procedural Due Process - there are procedures laid down by the government regarding the
collection of taxes. Hence, the creation of prescriptive periods or parameters set out by our
law-makers or a reasonable length of time for which the government can enforce its right.

FOR ASSESSMENT AND COLLECTION OF TAX DEFICIENCY

PROCESS PRESCRIPTION

Assessment 3 yrs

Collection* 5 years

*Collection must be from the date of assessment and in the circumstance that the taxpayer does
not pay. The government can go after the tax payer for a maximum of 5 years.

Exemption of prescription period for assessment: Non-Filing/Fraudulent Return - Prescription

period or collection is 10 yrs from discovery. Deficiency from fraudulent returns or non-filing is not
under the 3-yr prescription period.

2. Equal protection of the law

TAX 01.07 - TAX 01.08 1

 Same object, same tax rules. If there is no substantial differences from the objects, the same tax
rule shall apply.

3. Uniformity in Taxation
Uniformity understands that the taxpayers are diverse. Therefore the government must adopt a
classification system which must be based on substantial distinction and adopt a uniform rate per
class.

4. Progressive scheme of Taxation

The main reason for this is wealth redistribution. However, this guaranty is only applicable to
individuals since the progressive scheme of taxation, when applied to corporations, will open a
very wide avenue for tax evasion. One person corporations (OPC) are taxed as corporations.

5. Non-Imprisonment for non-payment of debt or poll tax.

This does not extend to bad faith. The non-imprisonment for non-payment of poll tax only applies
to the 5-peso community tax.

6. Non-impairment of obligation and contract.

Taxation is inferior to the non-impairment clause.
3 Types of Exemption

1. Contractual - contractual exemption is protected by the constitution. It cannot be repealed.

2. Constitution - Congress cannot touch upon constitutional exemption.

3. Legal - this type of exemption can be repealed since the one one who made this is the
congress.

7. Free worship Rule

Philippine do not tax religion.

8. Non-appropriation of public funds for the benefit of any church, sect or

system of religion

9. Exemption of religious charitable, or educational entities, non-profit

cemeteries, churches, and mosques from property taxes
Doctrine of Use - Only properties of REC that are actually, directly, and exclusively used for
REC purposes are under the exemption.

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 10. Exemption from taxes of the revenues and assets of non-profit, non-
stock educational institutions including grants, endowments, donations
or contributions for educational purposes

11. concurrence of a majority of all members of the congress for the

passage of a law granting tax exemption

12. non-diversification of tax collections

taxes must be absolutely for public purpose

13. Non-delegation of the power of taxation

Exemptions:
a. power to tax was delegated to the President under the Flexibility Clause of the Tariff and
Customs Code
b. power to tax was delegated to the local government units under the Local Government Code
(Fiscal Autonomy of Local Governments)
c. matters involving the expedient and effective administration and implementations of
assessment and collection of taxes or certain aspects of taxing process that are not legislative in
character

14. Non-impairment of the jurisdiction of the Supreme Court to review tax

cases

15. Appropriations, revenue or tariff bills shall originate exclusively in the

House of Representatives but the Senate may propose or concur with
amendments

16. Each local government unit shall exercise the power to create its own
sources of revenue and shall have a just
share in the national taxes

TAX 01.08
Situs of Taxation
Situs is the location of the object of taxation. Where the object is located, doon siya taxable.

TAX 01.07 - TAX 01.08 3