NATURE OF TAXATION

1. INHERENT POWER
a.Eminent Domain
b.Police Power
c.Taxation
2. LEGISLATIVE
•This means that tax laws must first be
enacted before taxes can be imposed.
3. SUBJECT TO CONSTITUTIONAL
AND INHERENT LIMITATIONS
• The power of taxation is considered plenary
(absolute or supreme), subject only to
constitutional and inherent limitations.
• This means that the government can tax anything or
anyone within its jurisdiction.
INHERENT LIMITATIONS
ON THE POWER OF
TAXATION
A. PURPOSE
•Taxes can only be levied for public
purposes
B. TERRITORIAL JURISDICTION

•The government may levy taxes only on

persons and properties within its
jurisdiction.
C. NON-DELEGATION OF
LEGISLATIVE POWER TO TAX
• The power to create tax laws rests with the
congress (Congressmen and Senators) and this
power cannot be delegated, except as expressly
allowed by law (delagation to the President, LGU
and administrative bodies)
D. TAX EXEMPTION TO
GOVERNMENT ENTITIES
E. INTERNATIONAL COMITY
•The government may not tax the property
belonging to a foreign government
CONSTITUTIONAL
LIMITATIONS ON THE POWER
OF TAXATION
A. DUE PROCESS AND EQUAL
PROTECTION OF THE LAWS
B. RULE OF UNIFORMITY AND
EQUITY IN TAXATION
•Items A and B protect the taxpayer from
promulgation of tax laws that are
unconstitutional, unjust or unreasonable
C. PRESIDENT’S POWER TO
VETO TAX BILLS
D. A LAW GRANTING ANY TAX
EXEMPTION NEEDS THE
CONCURRENCE OF THE MAJORITY
OF THE MEMBERS OF THE
CONGRESS
E. SUPREME COURTS POWER TO
MAKE FINAL JUDGEMENT ON
TAX CASES

•Items C to E protect the taxpayers from

potential abuse by the congress of its power to
promulgate tax laws.
F. NON-IMPRISONMENT FOR
NON-PAYMENT OF POLL TAX
•Poll Tax - a tax levied on every adult, without
reference to income or resources.
G. EXEMPTION OF RELIGIOUS,
CHARITABLE, OR EDUCATIONAL
ENTITIES, NON PROFIT CEMETERIES
AND CHURCHES FROM PROPERTY
TAXATION
H. EXEMPTION OF REVENUES AND
ASSETS OF NON STOCK, NON
PROFIT EDUCATIONAL
INSTITUTIONS FROM TAXATION
THEORY AND BASIS
OF TAXATION
A. RECIPROCAL DUTIES OF
PROTECTION AND SUPPORT
•The government protects the welfare of its
people, in return the people support its
government.
B. BENEFITS RECEIVED

• Taxes are use for the benefit of the public