Principles of Taxation and Inherent State Powers

This set covers core definitions, theories, inherent powers of the state, and both inherent and constitutional limitations of taxation based on the lecture material.

Taxation (as a State Power)

An inherent authority of the government to enforce proportional contributions from its subjects for public purposes.

Taxation (as a Process)

A legislative mechanism of levying taxes to enforce contributions from subjects.

Taxation (as a Mode of Cost Distribution)

A method by which the State allocates its expenses to citizens who benefit from public spending.

Theory of Taxation

The government's necessity for funding essential public services like defense, health, education, safety, and social protection.

Basis of Taxation

The mutuality of support between the people and the government where the government provides public services and the people provide the funds via taxes.

Conclusive Presumption of Benefit

The principle that every citizen and resident is undeniably receiving benefits from public services, meaning they cannot avoid taxation by claiming an absence of received benefit.

Benefit Received Theory

A theory of cost allocation presupposing that the more benefit one receives from the government, the more taxes they should pay.

Ability to Pay Theory

A theory requiring taxpayers to contribute based on their relative capacity to sacrifice for the government, taxing those with more wealth at higher levels regardless of benefits received.

Vertical Equity

A gross concept of the Ability to Pay Theory stating that one's ability to pay is directly proportional to the level of their tax base.

Horizontal Equity

A net concept of the Ability to Pay Theory that considers the specific circumstances of the taxpayer, such as expenses, to determine capacity to contribute.

Lifeblood Doctrine

The principle that taxes are essential to the subsistence of the government, and without them, the government would be paralyzed for lack of motive power to operate (CIR vs. Algue).

Police Power

The general inherent power of the State to enact laws to protect the well-being of the people.

Eminent Domain

The inherent power of the State to take private property for public use after paying just compensation.

Territoriality of Taxation

An inherent limitation stating the government can only demand tax obligations from subjects or residents within its territorial jurisdiction.

International Comity

The principle of mutual courtesy or reciprocity between nations under which governments do not tax the income and properties of other foreign governments.

Non-delegation of the Taxing Power

The doctrine that legislative taxing power is vested exclusively in Congress and cannot be further delegated, ensuring a system of checks and balances.

Substantive Due Process

The requirement that tax be imposed only for public purpose, collected under a valid law, and only by a taxing power having jurisdiction.

Procedural Due Process

The requirement that the government observe the taxpayer’s right to notice and hearing and avoid arbitrariness in assessment and collection.

NIRC Assessment Limitation

Under the NIRC, assessments must be made within $3$ years from the due date of filing or the actual filing date, whichever is later.

NIRC Collection Limitation

Under the NIRC, tax collection must be made within $5$ years from the date of the assessment.

Uniformity Rule in Taxation

The rule that taxpayers under similar circumstances should be treated equally, while those under dissimilar circumstances should be classified and taxed differently.

Progressive System of Taxation

A system where tax rates increase as the tax base increases, consistent with the taxpayer's ability to pay and equitable wealth distribution.

Poll Tax

A tax consisting of basic and additional community tax components; non-imprisonment for non-payment applies only to the basic component.

Doctrine of Use

The Philippine principle where only properties actually, directly, and exclusively devoted to religious, charitable, or educational activities are exempt from real property tax.

Doctrine of Ownership

A principle where properties of religious, charitable, or educational entities are exempt from property tax regardless of use (not applied in the Philippines).

Absolute Majority for Tax Exemption

The Constitutional requirement of a vote of the majority of all members of Congress to approve a law granting tax exemption.

Non-diversification of Tax Collections

The rule that tax collections should be used strictly for public purposes and never for private purposes.