COLLEGIO DE SANTA CATALINA DE ALEJANDRIA

Bishop Epifanio Surban, Street

Dumaguete City, Negros Oriental

INCOME TAXATION

MODULE V: Limitations on the Power of Taxation (Constitutional Limitations)

DESCRIPTION: This study the limitations on the power of taxation –

Constitutional and inherent limitations.

OBJECTIVES:
1. The student would be able to know the limitations on the power of
taxation.
2. The student would be able to apply these limitations in particular
situations.

TOPICS: Constitutional Limitations

A. Due Process of Law

1. State the Constitutional basis of due process of law. (Sec. 1, Art. III, 1987
Constitution.)
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2. What is the meaning of due process of law?

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3. What are the two (2) components of due process of law? Briefly define
each.
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B. Equal Protection of the Laws

1. State the Constitutional basis of Equal protection of the laws. (Sec. 1, Art.
III, 1987 Constitution.)

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2. What is the meaning of equal protection of the laws?

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C. Uniformity and Equity

1. State the Constitutional basis of uniformity and equity. (Sec. 28(1), Art. VI,
1987 Constitution.)
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2. What is the meaning of uniformity in taxation?

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3. What is the meaning of equity in taxation?

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4. What is the meaning of “progressive system of taxation”?
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D. Non-imprisonment for non-payment of poll tax

1. State the Constitutional basis of this prohibition. (Sec. 20, Art. III, 1987
Constitution.)
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E. No impairment of obligations of contracts

1. State the Constitutional basis of this prohibition. (Sec. 10, Art. III, 1987
Constitution.)
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2. What is the meaning of “impairment of obligation of contract”?

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F. Non-infringement of religious freedom

1. State the Constitutional basis of this prohibition. (Sec. 5. Art. III, 1987
Constitution.)
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G. Non-Appropriation for religious purposes

1. State the Constitutional basis of this prohibition. (Sec. 29(2), Art.VI, 1987
Constitution.
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H. No taxation of religious, charitable, and educational entitles, etc.

1. State the Constitutional basis of this prohibition. (Sec. 28(3), Art. VI,
1987 Constitution)
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I. No taxation of non-stock, non-profit educational institution.

1. State the Constitutional basis of this prohibition. (Sec. 4(3), Art. XIV, 1987
Constitution; Sec. 4(4), Art. XIV, 1987 Constitution.)
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J. Legislative Power to grant tax exemption
1. State the Constitutional basis of this limitation. (Sec. 28(4), Art. VI, 1987
Constitution.)
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K. Veto Power of the President
1. State the Constitutional basis of this tax limitation. (Sec. 27(2), Art. VI,
1987 Constitution.)
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L. Non-Impairment of the Jurisdiction of the Supreme Court.
1. State the Constitutional basis of this tax limitation. (Sec. 2, Art. VIII, 1987
Constitution and Sec. 5(2,b), Art. VIII, 1987 Constitution)
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M. Application – Identify the Constitutional Limitations violated in the following:

_____________________________1. A tax imposed beyond the jurisdiction of

the Philippine Government.
_____________________________2. A tax imposed based on a law judicially
declared invalid / void.
_____________________________3. Property of taxpayer was taken for non-
payment of taxes without giving notice to the taxpayer as required by law.
_____________________________4. A tax law which denies a taxpayer a fair
opportunity to assert his substantial rights before a competent tribunal.
_____________________________5. An ordinance imposes a property tax on
motor vehicles using the streets of Manila, such tax payable only by the
owners residing in Manila.
_____________________________6. A tax enforced against the manufacturers
of filled milk only but not against manufacturers of skimmed milk.
_____________________________7. Different income earners are made to pay
different rates of tax.
_____________________________8. Residential buildings and commercial
buildings are taxed and subjected to the same rate.

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 _____________________________9. A tax exemption based on contract is
revoked by a latter taxing statute.
_____________________________10. A license fee is imposed on the distribution
and sale of bibles and other religious articles by a non-stock, non-profit,
religious corporation.
_____________________________11. DPWH construct feeder roads on lands
owned by a private person.
_____________________________12. Use of a public property to a religious sect
free of charge.
_____________________________13. Congress passed a law depriving the
Supreme Court the power of review with respect to questions regarding
the legality of any tax law.
_____________________________14. The City treasurer of Dumaguete City sent
to COSCA a collection notice for non-payment of real property tax of the
buildings of the school.

N. True or False. Write true if the statement is true. Write false if the statement
is false.
____________________1. The City of Dumaguete imposed real property tax
of a parcel of land located in Sibulan, Negros Oriental is valid.
____________________2. If a tax is collected based on an invalid law, the
tax paid shall be returned to the taxpayer.
____________________3. There is no constitutional violation if different
income earners pay different amount of tax.
____________________4. There is no constitutional violation if non-profit
educational corporations are made to pay lower amount of taxes than that
paid by other corporations.
____________________5. An ordinance imposes a property tax on motor
vehicles using the streets of Dumaguete and payable only by residents of
Dumaguete violates the constitution.
____________________6. A person who fails to pay his cedula may be
imprisoned.
____________________7. A license fee imposed on the sale of religious
articles not for profit violates the constitution.
____________________8. A VAT imposed on the sale of religious articles
violated the constitution.
____________________9. A government building leased to Iglesia ni Kristo
violates the constitution.
____________________10. Salaries given to a priest for services rendered in
the Philippine Army violates the constitution.
____________________11. A building is leased to a religious institution for
25 years. The owner of the building is exempt from payment of income
tax to the leased building.
____________________12. An idle or vacant lot owned by the Roman
Catholic Church is exempt from payment of real property tax.
____________________13. A building owned by the Roman Catholic Church
is leased to the Bank of the Philippine Islands is exempt from payment of
real property tax.
____________________14. The land on which the Cathedral of St. Catherine
of Alexandria was erected is subject to real property tax.
____________________15. A proprietary educational institution is NOT
exempt from payment of real property tax.

Reference:

THE FUNDAMENTALS OF TAXATION. Hector S. De Leon and Hector M. De

Leon, Jr., 7th Edition, 2016 Rex Book Store.

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