General Principles of Taxation Flashcards

This set of flashcards covers the fundamental definitions, characteristics, purposes, and principles of taxation, as well as its relationship to the other inherent powers of the state.

Income Taxation

A cornerstone of modern fiscal policy through which governments collect a portion of individuals' and entities' earnings to fund public services and infrastructure.

Taxation

The power by which the sovereign raises revenue to defray the necessary expenses of government and fund operations.

Scope of Taxation

Described as Comprehensive, Plenary, Unlimited & Supreme, though not absolute as it is subject to inherent and constitutional limitations.

Inherent in the State

A characteristic signifying that taxation is inseparable from the State and exists by necessity of sovereignty, rather than by grant.

Legislative in Function

A defining characteristic meaning that only Congress has the authority to enact, amend, or repeal tax laws.

Revenue-Raising Objective

The primary purpose of taxation which is to collect revenues to support government in exercising its functions.

Necessity

A foundational pillar of taxation stating the State must collect taxes to perform essential functions because governance is impossible without revenue.

Reciprocal Duties of Protection & Support

The basis of taxation wherein citizens pay taxes and, in return, the State secures their enjoyment of the benefits of an organized society.

Progressive Taxation

A method used to reduce inequalities by mitigating excessive disparities in wealth distribution.

Protective Tariffs

Taxes imposed on imports to shield domestic producers from foreign competition.

Police Power (as a purpose)

The implementation of the state's power to promote the general welfare of the people through taxation.

Levying

The legislative stage of taxation where Congress defines taxable persons, items, and rates.

Collection

The administrative stage of taxation where the DOF, BIR, and Bureau of Customs administer and enforce tax compliance.

Fiscal Adequacy

The principle that revenue sources must be sufficient to meet government expenditures regardless of economic conditions or business cycles.

Theoretical Justice (Equity)

The principle that taxes must be proportionate to the taxpayer's ability to pay, with those of greater capacity bearing a heavier burden.

Administrative Feasibility

The principle that tax laws must be clear and capable of convenient, just, and effective administration and enforcement.

Inherent Powers of the State

The three powers comprising Taxation, Eminent Domain, and Police Power, which exist independently of the Constitution.

Equivalent Compensation

A trait shared by Taxation, Eminent Domain, and Police Power, though the form (public benefit, just compensation, or intangible benefit) varies.